2019 shaping as watershed year for renewables in resource sector

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While the majority of mining operations globally continue to rely on traditional power sources, mainly fossil fuel-based grid power, piped gas or off-grid diesel-generated power, momentum is building behind the industry’s energy transition. Beyond signalling their intention to reduce emissions from fossil fuel operations, or as is the case with Rio Tinto abandoning coal completely, mining companies are getting serious about integrating renewables into their energy mix to reduce operational expenditures.

“Mines are most interested in solutions that can reduce costs and carbon emissions,” said Dave Manning, juwi’s Global Head of Hybrid. “The most advanced options to deliver this are hybrid systems that integrate solar, wind and batteries with diesel, gas or heavy fuel oil generators, without compromising reliability or power quality.”

Last month, juwi’s landmark Australian project at the DeGrussa mine achieved its annual generation targets one month ahead of schedule. The Sandfire DeGrussa facility consists of a 10.6 MW tracking PV project and a 6 MW battery coupled with a hybrid control system which juwi developed, constructed and has been operating and maintaining since 2016. “This confirms that hybrid systems reduce costs without compromising power system reliability and safety,” Manning said.

In the Australian mining sector, the deployment of renewable energy hybrids appears to be gaining momentum. Only last month, plans were unveiled for two major hybrid microgrids powered by solar, wind and batteries in remote locations at the fringe of Western Australia’s electricity grid. One of the two is the Agnew hybrid microgrid to be deployed at a gold mine in the northern Goldfields consisting of five wind turbines delivering an 18 MW wind farm, a 10,000 panel 4 MW solar farm and a 13 MW/4 MWh battery storage alongside a 16 MW gas-fired power station. The facility will be delivered by distributed energy developer EDL in partnership with juwi.

Against the backdrop of the mounting pressure from consumers, investors and regulators pushing for an energy transition, the main factor supporting the economics for hybrid microgrids at mines, as well as across the entire commercial and industrial landscape, are the rapidly falling costs of renewables and storage. “In the absence of carbon pricing or robust support schemes for renewables in mining, solar, wind and battery had to stand on their own feet commercially right from the start,” Manning noted.

As mining microgrids develop both in size and complexity, the seamless onsite integration of renewables into operations is presenting less of a barrier to adoption. At the Energy and Mines Australia Summit held last month in Perth, the German-headquartered project developer launched a new solution – juwi hybrid IQ, which enables renewables, batteries and new technologies such as hydrogen to be integrated into mining operations. At the core of the system is a micro-grid controller and SCADA system that incorporate all generation and distribution assets from wind, solar and battery to gas, diesel, heavy fuel oil and even hydrogen generators. On top of that, juwi hybrid IQ also includes enabling technologies such as cloud and wind forecasting. 

While its new solution is designed to integrate hydrogen in mining microgrids, juwi sees still many obstacles on the way. “Right now, however, the costs of electrolyzes and fuels cells are too high to compete with traditional fuels or batteries,” Manning said. He added that there is also a lack of experience in using hydrogen combined with other fuels in reciprocating engines or gas turbines.

Green hydrogen in mines

Nonetheless, the strong case for hydrogen has long been known, with Australia among the countries most favourably placed to turn hydrogen hype into real-world deployment. Declaring 2019 a critical year for hydrogen, the International Energy Agency said hydrogen was enjoying unprecedented momentum around the world and could finally be set on a path to fulfill its longstanding potential as a clean energy solution. Adding to the momentum, the Council of Australian Governments released consultation papers last week on a national hydrogen strategy and is now seeking submissions from the industry and community.

In the mining sector, hydrogen has massive potential including for fuel substitution, renewables integration and power supply. According to Gus Nathan, Director of the Center for Energy Technology at the University of Adelaide, one of the key potential high value applications is in the displacement of diesel in underground mines, noting that such applications would bring a double benefit – displacing diesel and reducing ventilation costs. “However, while some of these vehicles are now emerging onto the market, there is limited experience in establishing complete systems with proven reliability,” Nathan said. He believes a key milestones for hydrogen in mines will be demonstrations of reliable, operating systems and more understanding of the full value chain.