Lesson learned from the Fekola Mine solar project

MELODIE MICHEL REPORTER Energy and Mines

As solar and battery prices keep dropping, more and more African mines are considering self-generating solar power to cut fuel consumption costs and reduce CO2 emissions. But in an ever-changing technical and commercial landscape, maintaining flexibility is key. Martin Schlecht, Co-Founder and Acting COO of Suntrace, shares his advice for successful project implementation.

Energy and Mines: How would you summarize the latest advances and benefits that renewable energy and storage can offer mines?

Martin Schlecht: The situation keeps improving in terms of cost reduction, with the main recent advance being the battery price drop. Solar already offers huge benefits, particularly for offgrid mines. When you’re running on HFO or diesel, any kW/h of solar installed will offer fuel savings and therefore cost savings. With batteries, you can mitigate the fluctuations from solar and help to keep engines cycling up and down to follow the solar patterns to a minimum. That’s essentially what we are implementing with B2Gold at the Fekola Mine. The size of storage there will not allow a lot of energy shift from daytime to evening hours, but the battery will smooth the PV outputs and give operators enough time to turn on the engines in case of clouds, since it takes about 20 minutes for an HFO engine to go from 0% to 100%. Overall, this system will deliver 19% of fuel savings.

That project was already economic when B2Gold decided to do it in 2019. But now, almost two years down the line, we could achieve a higher solar portion for the same cost of energy, because solar and battery prices have come down and a larger system is economic today. That doesn’t mean you should wait until it’s cheaper, but if you build a solar plant now, focus on getting it expanded when the commercials improve.

E&M: How can you ensure that a renewable energy project for a mine is set up right from the start but maintains the flexibility needed for further expansion?

MS: The first thing is to understand your technical system: what is your operational need and how does it fluctuate? You need to analyse your demand and what kind of back-up you need. Then, look at your life of mine: is it long enough for an investment? It’s important to look at what you have and what you need, what we call the feasibility study.

Then, determine the right commercial structure for you. If the mine has a lot of cash in the country, they might want to buy the renewable power facility as an EPC. You can build the project in phases and upgrade it every couple of years to increase your solar share over time. That’s the biggest benefit renewable and storage offer. Or do you want to keep your cash for exploration of new mines? In that case, you might prefer to have an IPP supply the power across the fence. But what are good PPA terms, and how are you structuring the contract to compensate for when your mine is not consuming? How long is the downtime that the power supplier needs to take into account? It’s important to look at the right technical and commercial set-up from the start, and Suntrace runs both the technical and the financial model to support EPC and IPP tenders so we can help mining clients identify the right solution for each mine.

The usual approach to power projects is a one-off investment: you put it up at the mine and then you don’t need to worry about it. That approach is changing with renewables: if you’re already procuring energy under a PPA, be it from the grid or from an IPP, then it may be difficult to implement a renewable facility due to your contract obligations. Also looking forward, if you are considering switching from HFO to a gas-based supply, it will surely reduce your CO2 emissions but will also reduce your freedom to implement renewables in addition. So it is important to develop a roadmap to decarbonization for the mine by considering adding more renewables over time to benefit from the market developments as they support the mine’s business case. Miners may want to adopt a different perspective on energy.

E&M: What are some of the takeaways from your experience working with B2Gold on the Fekola solar project in Mali?

MS: First, the project is almost completed as we speak, thanks to a very good team effort between B2Gold, the Fekola mine and Suntrace/BayWa re. From a technical perspective, the concept is working out as planned during commissioning.

Cooperation with the mine for the electrical integration worked very well, and we also structured the project implementation to commission the solar plant in increments, whenever a certain array was ready to generate. For instance, the battery was commissioned before the solar plant generated the first electricity. This way the HFO power plant operation could adjust to the solar in steps.

We spent intense efforts in integrating the solar, battery and EMS (Energy Management System) with the existing SCADE for the engines, and developed an operating scheme that allows for the maximization of the solar energy while keeping the operators in control of the engines. The HFO engines are not compatible with an automated start/stop of the engines, and also the continuous energy supply to the mine will always have the priority over the solar energy. We’ve already had the first successful operations where an engine was shut down and the solar plant took over.

Apart from the completion success, we were dealing with some challenges successfully, that were imposed by the Covid-19 pandemic and the mine’s response to safeguard the mining operations from the virus. Clearly and understandably, gold operations had full priority. This placed the solar project on second priority for some time and increased the complexity to implement the solar plant.

E&M: What opportunities do you see for additional projects with Africa mines?

MS: We’ve just started another project with a mine in West Africa, and I see more and more mines coming up. CO2 reduction and decarbonisation are big objectives for mines and they are incentivized to look into this topic. Successful projects like the B2Gold Fekola solar project will increase trust in adding battery storage to the solar plant. Furthermore, miners will all figure out that solar and batteries bring economic benefits on top of CO2 savings. At Fekola, the project achieves 19% fuel reduction.

However, based on our analysis, a 30 to 40% solar share would be feasible today with the same payback period for a larger project. Next year we could see a 50% solar share reaching the same economics. Provided you have enough space for the solar plant, the opportunity to reach a high solar share and large cost savings are huge. We believe that the Fekola Solar Project can serve as a model for other mines, specifically since first results are proving that it works. The technical concerns are going away with proven references.

E&M: You’ve already touched upon EPC and PPA structures, but what about leasing — in what cases could this option be beneficial for a mine?

MS: A lease structure might be interesting for mines with a short life: if you only have a few years left, you might not want to invest Capex to build the power plant yourself, and with a PPA, the shorter the contract, the higher the price. Of course, a lease comes at a higher cost because the facility will need to be removed after the mine closes, but it’s still less than the full Capex and allows the mine to cut CO2 emissions and achieve cost savings. Whether this approach is useful is usually determined by a comparison with the alternatives.

E&M: What are some of the key things mines should consider before going to tender with a project?

MS: All mines are currently receiving a lot of different offers from equipment suppliers to IPPs, EPC firms, battery suppliers, solar developers, etc. I’ve heard of a mine receiving 120 expressions of interest for a project. It can be very difficult for a mine to differentiate between them. That’s where a consultant like Suntrace can bring value, by helping the mine determine its needs and requirements in the first place. Knowing what you want as a mine, you can go to the market with a clear request, and still there will be enough competitors to meet your needs and bring the price down to a reasonable level. Sometimes taking a little time in the first step to make a solid plan can save you a lot of time and headache later in the execution.

E&M: What are you looking forward to at the upcoming Energy and Mines Africa Virtual Summit, May 4-6?

MS: We’re hoping to have a successful completion story from B2Gold before the conference so we can share operational results, and I hope it gives miners the confidence to follow without hesitation in implementing larger solar project