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Published on September 25th, 2017 | by The Beam


Mining Sector Embracing Microgrids: Hybrid Systems Reduce Energy Costs & Environmental Impact

September 25th, 2017 by  

By Ed Meza

Editor’s Note: Solar energy prices and battery storage prices have seen tremendous price drops in the past 3–10 years. This has led to solar power becoming the cheapest option for new electricity capacity in some places — well, a quickly growing number of places — and has even led to solar plus storage becoming the most competitive offering in certain locations and applications. Of course, markets with high electricity prices and good solar resources are some of the best early markets for solar plus storage. The mining sector — an enormous energy user — is one of global markets that best matches this description. In the article below, which is based on a new study from the microgrids business within ABB, we delve into this topic a bit further. —Zach Shahan

Remote, off-grid mines can achieve up to a 28% reduction in fuel and CO2 emissions by using microgrids that combine solar photovoltaics (PV) and battery energy storage systems (BESS) with diesel generators, according to a new study.

The report, Reducing Energy Costs and Environmental Impacts of Off-Grid Mines, details how microgrids can help clean up the off-grid mining sector in an economically sensible manner.

In the face of increasing global pressure to mitigate CO2 emissions and declining costs for renewables and energy storage applications, power systems in the mining sector are undergoing a major structural transformation. “For off-grid mining in particular, renewable and storage technologies present an ideal opportunity not only to improve the mine’s environmental footprint, but also to reduce energy costs while improving power quality,” ABB’s microgrid business states in its report.

Indeed, while off-grid mines have traditionally used diesel to power their operations, the sector is seeing greater use of hybrid energy systems as it heads towards a future of 100% renewables. Solar PV–diesel and wind–diesel microgrids are already powering off-grid mining sites around the world. The focus now, according to the study, is “on developing unsubsidized, profitable business cases that effectively reduce fuel dependency.”

At the moment, the global mining industry’s share of the world’s total energy consumption ranges somewhere between 1.25% and 11%. In 2014, the sector’s energy consumption amounted to nearly 1,400 terawatt-hours (TWh). By comparison, the total energy consumption of Spain that year just surpassed 1,300 TWh.

The path to lower carbon emissions and energy costs can be one of “incremental hybridization.” While diesel generation has had a good track record in providing reliable power to off-grid mines, it faces a number of challenges, including lower-cost renewables; additional carbon taxes on fossil fuels that are likely to increase future fuel prices; the already high cost of power from diesel generators compared to energy supplied by a network; fluctuating diesel prices; and the logistical issues and additional transport and storage expenditures that can result from diesel deliveries.

Renewables and energy storage systems have already proven themselves as effective solutions for generating high-quality electricity, is pointed out in the study. Furthermore, the rapid drop in wind power, solar power, and energy storage prices in the past decade have made these options more economical in many off-grid locations.

Mining companies can implement the hybridization process through a modular approach, with a small investment in either renewable energy or storage that can later be expanded as needed, thereby lowering investment risk and responding to changing market conditions, such as increasing prices for delivered fuel or decreasing prices for solar PV. The benefits for mining companies include not only significant reductions in CO2 emissions due to fuel savings, but also lower maintenance costs and improved power quality, according to ABB’s microgrid business.

The report examined four possible scenarios:

  • Base case, in which pre-existing diesel generators continue to supply power and operating reserve.
  • Diesel + Battery Energy Storage System (BESS), in which BESS is used to remove the need for an operating reserve and optimize generator efficiency.
  • Diesel + solar PV, in which a solar PV plant without energy storage is used to deliver fuel savings.
  • Diesel + BESS + solar PV, which combines BESS with solar PV to deliver improved diesel generator operating efficiency and increased solar PV integration.

Not surprisingly, in the study it is concluded that the diesel + BESS + solar PV solution offered the maximum value, as the storage component replaces the diesel generator as an operating reserve, smooths demand peaks, and allows for maximum solar PV integration in addition to effectively managing fluctuations caused by renewable energy, such as cloud cover in the case of PV.

To download the report, go to ABB’s microgrid business report page.

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About the Author

The Beam Magazine is a quarterly print publication that takes a modern perspective on the energy transition. From Berlin we report about the people, companies and organizations that shape our sustainable energy future around the world. The team is headed by journalist Anne-Sophie Garrigou and designer Dimitris Gkikas. The Beam works with a network of experts and contributors to cover topics from technology to art, from policy to sustainability, from VCs to cleantech start ups. Our language is energy transition and that's spoken everywhere. The Beam is already being distributed in most countries in Europe, but also in Niger, Kenya, Rwanda, Tanzania, Japan, Chile and the United States. And this is just the beginning. So stay tuned for future development and follow us on Facebook, Twitter, Instagram and Medium.

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