Power supply
Agnew is a successful example of a remote mine targeting zero carbon emissions.
a system, which has the potential to affect the stability of the power network leading to supply interruptions and production outages,” explains Koerting. “To solve the stability issue, batteries must be costed in – but the batteries themselves do not generate any additional renewable energy. In fact, they consume some of it.”
In addition, the investment in capital intensive renewable generation, which is offset by a very low operating cost, changes the risk profile of financing the mining operation. This is particularly striking when there is a mismatch between the life of the mine and the term of amortisation of the renewable asset investment, which is typically 25 years. “Smaller capped miners may not have the capacity in their balance sheet or have risk-averse investors that will limit their ability to make the shift unless they can guarantee the supporting revenue for the full 25 years,” says Koerting.
Even for a huge operator like Gold Fields, there was enormous risk involved to achieve what it has to date with renewable projects. With Agnew, some of this was overcome thanks to funding help from the Australian Renewable Energy Agency (ARENA), which allowed investment in a larger battery to solve the technical risk without being a commercial hurdle. However, the risk of the mine life being shorter than the asset life continues to be borne by Agnew. “Agnew did opt to accelerate lease payment to shorten the amortisation of the assets to ten years – increasing unit cost for the first ten years then significantly reducing thereafter – and otherwise Agnew continues to invest heavily in brownfields
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exploration year-on-year to extend the life of the mine,” Koerting says.
Risks worth taking
For Gold Fields, there is no doubt that these are risks worth taking. Aside from Agnew, its hybrid power system at Granny Smith mine in Perth, which comprises 8MW on-site solar, 2MW battery power systems and a gas power plant, is fully operational, with 10% of the energy supply sourced from renewables. The company is also making good progress on its Gruyere location, with commissioning for its 12MW solar and 4.4MW battery plant scheduled for the end of 2021. At St Ives in Western Australia, a scoping study is underway to evaluate supply alternatives once the current power agreement lapses this year.
Hybrid projects in Chile and South Africa are also under development and the company has a long-term commitment of 20% renewables at all new projects, with most plants set to be managed by independent power producers that will recoup their capital investment via a long-term supply agreement with the mines.
In the meantime, Harman hopes the Agnew project will provide an example for other miners to follow. “Agnew’s success is great news for remote mines and communities targeting zero carbon emissions. All the big mining companies are committed to reducing their carbon footprint and many have zero-carbon ambitions,” he says. “This type of clean energy technology, in providing an absolute key input into mining operations, is the game changer.” ●
World Mining Frontiers /
www.nsenergybusiness.com
EDL
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