Energy and Mines Magazine Issue 53

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Pressure to meet net zero targets is transforming the way miners procure power, forcing energy suppliers to innovate to meet new demands.

Craig Blizard, Chief Technology Officer at Pacific Energy, talks to Energy and Mines about how changing customer expectations and policies are shaping energy development.

ENERGY + MINES: How is the drive to decarbonise mining operations changing the energy procurement process and mix for miners?

CRAIG BLIZARD: The decarbonisation pressure is much more real than it has been in the past. Project technical requirements are becoming increasingly more ambitious in terms of RE generation mix targets and our clients are expecting us to push the limit commercially and technically in terms of our offerings.

Furthermore, the financial backing for these initiatives is much sounder. It is no longer just a goal or value add for the projects, it is at the very core of how these projects are developed.

We are also seeing that everyone involved in the delivery chain – client and supplier sides – are just so much more educated on the nature of technology and economic complexities of projects.

EM: What opportunities do you see for smaller, isolated mining microgrids to connect to larger transmission networks?

CB: For those miners that are nearby (or will eventually be nearby) to larger networks, the readiness for integration to those networks presents huge opportunities but also imposes several risks and technical hurdles.

On the positive side, these isolated networks have had to endure extremely low system strength and inertia and at the same time maintain operational stability without any support from larger more diverse networks. The interconnection of these networks will allow for greater flexibility of generation and load balancing, and in turn support decarbonisation goals for both the miner and the network system operator.

Having solved many of the associated technical issues while being an isolated network will allow for services and more

advanced solutions to interact with the wider network and bring value to both sides. An example of this is the provision of grid forming BESS (battery energy storage systems), which are often used in isolated networks. These units will support the interconnection stability in a way that would not typically be realised in a standard network extension to a thermal plant.

Considering the challenges, the network extensions will require careful thought and planning to ensure that power quality and control approaches between the two sides of the connection point achieve true interoperability.

EM: What are the key policy and regulatory changes in Western Australia that are influencing power decisions for mines?

CB: We are seeing a greater level of scrutiny regarding control system and protection system standardisation, as well as tighter performance benchmarks for power system operation. Decarbonisation policies themselves are lifting the time pressures to see real transition and forcing us to work through these technical challenges.

The maturation of grid connection rules, particularly in the more electrically dense regions, is changing the way projects are being executed, with much more oversight and higher expectations around power system modelling and project due diligence processes.

In the not-too-distant future, we will see greater coordination of mine behaviour due to their uniquely flexible load and generation system mixes.

These changes will be driven by, and will at the same time support, the continual advancement of mine electrical infrastructure, given they are the key stakeholders in this transition.

EM: How can miners balance their short-term decarbonisation goals with a longer-term ambition to reach net zero?

CB: Realistically, the approach to these sorts of problems is a series of carefully planned short-term steps.

This means you are aware of the long-term goals, but you do not let the enormity of the problem stop you from doing something now. You need to find the balance of doing longerterm planning without making the plan so big it prevents action or choice paralysis.

Focus on the wins you can have today, with a mindset of a complete roadmap moving along in parallel.

Technology selections must be flexible and adjustable, so do not pursue the cheap and cheerful, focus on the right level of quality. It does not need to be gold plated but it needs to be taking the longer-term view into the mix.

When building the roadmap, you also must understand the value of fully exploiting the assets. Don’t just think about what one asset type can give you now, think about other things it can offer or what it can enable, how can it be adjusted (via control modes or small plant modifications) to suit wider, future goals.

EM: How are smaller miners or mines with short lifetimes managing energy decarbonisation planning?

CB: These sorts of miners are highly active in the pursuit. They are not deterred by the mine life.

Balancing mine life with medium term project payback periods was historically extremely hard. Now we are seeing customers strike the right balance between those elements as well as getting good bang for buck. This means they can achieve noteworthy decarbonisation outcomes, get some wins, and build confidence albeit against the backdrop of a short project duration.

As we know, achieving noteworthy decarbonisation outcomes requires careful and timely decisions. The no decision case is no longer viable.

It’s also being ready to take calculated risks about what those assets can do even if the mine stops operating. Considering questions like: Can we deploy these elsewhere? Can we use this asset for another service into the network after local generation needs change? You need to keep your eye on the market and be ready to pivot.

EM: What do you see as the next key developments for mines as they progress their energy decarbonisation strategies?

CB: If I had to boil it down, I would say it is about network modernisation, interoperability of zones and healthy competition.

Healthy competition is a wonderful thing for our collective ambition!

Moreover, it is about making decisions now rather than waiting for perfection down the road.

We will see various regional network expansions, we will see greater levels of performance and transparency expectations on isolated and regional networks, and we will see increased technology options coming into the mix.

These local and regional networks will start to become more connected, even enmeshed in some circumstances. Through that, interoperability of the network zones and dealing with different generation and load behaviours will be critical.

In the end, these new or more advanced power systems will lend themselves to creating mutual benefits of the hybrid networks in terms of their load’s behaviour, generation mixes and increasingly aggressive decarbonisation targets.

Craig Blizard, will be presenting “How is Decarbonisation Changing Energy For Mines?” at Energy and Mines, Perth, WA, May 7th

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KEY LEGAL LEVERS IN THE RACE TO DECARBONISE

As mining companies innovate and collaborate to meet both voluntary and mandated decarbonisation targets, they also need to keep an eye on fast-changing legislation.

Jo Garland, APAC Energy Transition Lead and Partner at HFW, discusses the main legislative levers in the decarbonisation journey and how miners are managing these legal levers.

ENERGY + MINES: How has the first year of the Safeguard Mechanism been for miners and how are compliance strategies evolving?

JO GARLAND: With the first Safeguard Mechanism reports due this October, miners affected by the scheme (i.e. those who produce more than 100,000 tonnes of CO2-e per year) have been considering the availability, cost and timeframe for adopting emissions reductions technologies to meet the mandatory annual 4.9% scope 1 emissions intensity reduction.

The real test of compliance strategies will come when the first reports are due, but these are evolving to:

• Better understand and define the mine’s carbon footprint and what needs to be done to increase confidence in emissions data, including through the use of digital measurement and reporting applications.

• Map where current assets are in their useful lifecycle –and when the desired technology will become available on a mass scale, and at what capital outlay.

• Weigh the timeframes and costs of the available technology with the costs of purchasing Australian Carbon Credit Units (ACCUs) in lieu of the mandated emissions reductions. ACCUs can be used to demonstrate a reduction in emissions intensity, but miners will be required to provide a “written explanation of why more carbon abatement was not undertaken” if their total number is greater than 30% of their baseline footprint. This explanation will be published by the Clean Energy Regulator, with a degree of “naming and shaming” of companies who are heavily relying on offsets. Miners also need to be aware that they are competing with the big oil and gas companies in the race to purchase ACCUs.

Pressure on large miners to decarbonise is also increasing because of the new climate-related financial disclosures regime, under which all Safeguard Mechanism facilities, as well as other large entities that meet threshold tests, will need to publish annual sustainability reports.

Reporting will be mandatory and phased in from 1 July 2024, and much like under the Safeguard Mechanism, there are significant penalties for non-compliance. ASIC has the power to issue directions to test the veracity of statements made in sustainability reports, so directors need to ensure that they have accurate and reliable climate data to meet their reporting obligations.

EM: What are some of the challenges you’re seeing with electric vehicle infrastructure as miners move ahead with electrification? What about the proposed changes in fuel efficiency standards?

JG: In my experience, WA is not currently seen as a particularly attractive market for electric vehicles, because we do not yet have any legislation phasing out fossil fuel cars and heavy freight or requiring manufacturers to report on how many zero emissions vehicles they are selling to a region. Manufacturers of electric vehicles and charging infrastructure are drawn to markets where there is a clear legislated demand. While miners have net zero targets and the biggest emitters have legislated requirements to reduce their scope 1 emissions, this hasn’t been directly tied in with electric vehicles and charging infrastructure.

This may be set to change if the government legislates its proposed fuel efficiency standard, which is expected to come into effect from 1 January 2025. The government is underpinning this with the rollout of funding for charging infrastructure.

However, this is not as simple as just installing electric vehicle chargers along key freight routes: a mine site may have several trucks that it needs to charge en route from a mine site to its destination, and often in regional areas. Each of these trucks needs to fast-charge with more electricity in half an hour than an entire regional town may use on their peak day for electricity use. This may result in congestion and wait times if there is insufficient power capacity within regional areas to charge multiple vehicles simultaneously. So, in addition to installing chargers, we will also need to ensure that there is the surrounding electricity infrastructure and capacity to support short but steep spikes in electricity needs.

Lastly, like many other aspects of renewable energy projects, getting the approvals for electric vehicle charging infrastructure on grid-connected mines can take years. Conversely, off-grid electric vehicle infrastructure that is powered by renewables and supported by BESS needs to be continuously reliable so as to avoid disruptions to operations.

EM: How would you say deal structures for hybrid/renewable mine power systems have changed since you were involved in the first remote hybrid power system for the DeGrussa mine?

JG: The ambition, scale and renewable energy penetration levels have increased exponentially since DeGrussa, which was just under 10 years ago. We’re seeing more phased developments starting with gas, solar and potentially BESS – and then looking to wind in later phases. Single standalone systems are being replaced with smart renewable microgrids at scale, with very high levels of renewable energy output.

The main contracting structures of build, own, operate (BOO) or a variation of that, or straight EPC model are still the most used – but we’re seeing more parties involved in the construction and technology provision (larger and more complex) projects. Tariff structures still don’t seem to have progressed as much as they potentially could – and guarantees offered seem to be settling into an industry norm.

EM: Do you see opportunities for collaboration on renewables for mining companies in WA, and what are some of the legal implications of joining forces on infrastructure?

JG: Opportunities in the Pilbara will only grow, especially with the $3billion rewiring the nation to fund transmission in the Pilbara, the proposed hydrogen hub in Maitland and other mega-renewable hubs.

Collaboration around power for the mid-tier miners will depend on location, but we could potentially see shared electric vehicle or hydrogen fueling infrastructure. There are also many opportunities for forward-thinking mid-tiers to partner with technology providers and energy developers to pilot the new decarbonisation or renewable energy technology – benefiting the mine and advancing the technology to scale. Joining forces on infrastructure needs to be carefully managed

from a legal perspective. Australian competition law prevents any arrangements that could substantially lessen/foreclose competition, be seen as an attempt to fix prices or terms between competitors or as an abuse of market power by one party. Who owns intellectual property or improvements on that IP from pilots also needs to be worked through and parties collaborating should be clear on what they want to get out of the collaboration.

Jo Garland will be chairing the Keynote Panel at Energy and Mines Australia on May 7th which focuses on “Green Commodities: Balancing Expectations without Valuations”.

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POWER + TECHNOLOGY CONSIDERATIONS IN THE TRANSITION TO ELECTRIC FLEETS

The need to decarbonise and meet greenhouse gas reduction targets is driving the mining industry attention on the potential to electrify haulage. The transition to electric haulage, however, will involve much more than the significant changes to the equipment.

Cameron Sharp, Global Microgrid Account Manager, Electric Power at Caterpillar, shares some of the insights gained in supporting several global miners in their consideration of the potential to adopt electric fleets, and what the industry at large will face in preparing their power systems and employees for a successful transition.

ENERGY + MINES: What are some of the lessons you have learned to date from Caterpillar’s current electric fleet trials and their impacts on mine power infrastructure?

CAMERON SHARP: The pilots we have conducted to date have made it clear that the adoption of a battery-electric fleet will trigger a transformational change to mine designs and the associated electrical infrastructure. Miners that plan to transition to electric mobility should take the time to assess their current power infrastructure and make the necessary adjustments before bringing in electric equipment.

EM: What should miners do today to augment their power systems in order to be ready for an electric fleet?

CS: An electric fleet will significantly increase power demands on site, and miners will want to ensure this extra demand is met by non-polluting sources of energy. Additional green energy and energy storage are likely to be a required element of the solution based on the spikey load profile which will accompany the charging of an electric fleet.

EM: What are some specific considerations for mines running on hybrid microgrid power in the transition to electric mobility?

CS: Because electric mining vehicles dramatically change a site’s load profile, mines operating on microgrid power will need to ensure modularity and the ability to scale these solutions to meet the additional power demands of an electric fleet.

EM: What are some of the operational technologies that will enable the transition to and optimal performance of electrified fleets?

CS: Advancements in site energy storage technologies will be key to increase the flexibility of mines’ power systems ahead of transitioning to electric fleets. Additionally, expanding the capabilities of autonomous haulage and fleet management systems to issuing vehicle assignments will ensure optimal vehicle efficiency and optimize charge management.

Autonomous trucks can help to enhance mine site safety but also improve productivity by creating increased visibility for mine site coordinators, enabling more consistent operations for both staffed and autonomous machines. As such, these technological developments will be essential in the transformation of mine mobility.

EM: Aside from technology and infrastructure, what other impacts should miners prepare for when transitioning to an electric fleet (i.e., training, performance, etc)?

CS: Managing the transmission and distribution of electric power to associated charging infrastructure is critical to keeping the batteries charged and optimising fleet productivity. This will require new skills and the development of training programs that will also assure new operational and support practices are aligned with evolving legislation, safety, and best practices.

EM: What’s the role of autonomous haulage systems in electric fleet optimization?

CS: Autonomous haulage is a central enabler and will provide the decision support platform to firstly validate the fleet’s ability to deliver on the shift production plan, and then manage shift execution by leveraging the repeatability and consistency of autonomous haulage to issue precise assignments for both the collection (load) and delivery (dump) of materials, while optimising the periodic assignments of electric vehicles to fixed and dynamic charging infrastructure.

We know it will take holistic solutions, leveraging smart data to help miners meet their safety, productivity, and optimization goals, and we want to be a key part of driving that change.

Cameron Sharp is presenting “What Does Mining Need for the Energy Transition?” at

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2030 IS LOOMING: FAST-TRACKING RENEWABLE ENERGY TO MEET DECARBONISATION TARGETS

In the drive to decarbonise mining operations within the required timeframe, finding the right partners can help reduce costs and optimize power solutions.

Geoff Hobley, General Manager, Remote Energy at EDL, shares the company’s experience developing hybrid projects for 80% plus renewable penetration.

ENERGY + MINES: With the increasing focus on decarbonising industry, we often hear the term carbon abatement referred to. What does it mean, and when will it happen?

GEOFF HOBLEY: Carbon abatement is the curbing of greenhouse gas (GHG) emissions, with a particular focus on reducing carbon dioxide or equivalent (CO2-e) emissions as these make up 76% of global GHGs.

The Australian Government has legislated GHG reduction targets for 2030, with a plan to reach Net Zero carbon emissions by 2050 while adhering to an overall “carbon budget” of emission volumes for the period between 2021 and 2030.

The Safeguard Mechanism applies increasing emission reduction obligations on large emitters. Currently, Australia is not on track to meet the 2030 target, which means additional measures may be required and could include increased obligations under the Safeguard Mechanism or expanding the scheme to smaller emitters.

For the mining industry to meet legislative requirements to significantly reduce carbon emissions, an urgent transition to alternative energy sources is required. Hybrid renewable power facilities are ideally placed to deliver significant carbon reduction to meet these requirements now, while also being capable of future expansion to accommodate mobile plant electrification to further reduce emissions.

EM: What approach is EDL taking to decarbonising energy supply for mining operations?

GH: The arguments around whether net zero is achievable and what it will cost are delaying action on reducing emissions. Companies like EDL are demonstrating today that significant emission reductions can be achieved by deploying renewable hybrid power solutions. Our Agnew hybrid renewable microgrid that powers Gold Fields’ Agnew gold mine in Western Australia sees approximately 40,000 tonnes of CO2-e emissions avoided per year from the mine’s operations.

EDL is developing projects that will deliver over 80% of total energy to mine sites from renewable sources. We expect this RE percentage will increase naturally as prices for solar and batteries decrease, and we predict up to 95% RE will be achievable in coming years.

EDL is also working on a roadmap to 100% renewable power supply, delivered from a range of technologies. Whilst not practicable today, we have confidence that it will be achievable within the timeframes required to achieve net zero by 2050.

EM: Is there a gap between what is required to power mining operations and what current hybrid systems can deliver?

GH: Mining companies are generally seeking the most economic supply of power for their projects and with the

many factors influencing the economics of power supply, this will likely be a different solution for each project.

Hybrid power systems can deliver low emissions power supply to any mining operation. By acting promptly, mining companies can maximize the emissions reductions achieved, while minimizing the cost of development.

It is important to understand that very significant emission reductions are achievable today – there is no need to wait for new technologies to deliver this. Current solutions can be designed to allow for future electrification of mobile plants and thereby further reduce emissions. For the mining sector, EDL believes the 2030 emissions reduction targets set by the government are achievable, but action must be taken now.

EM: How can customers and hybrid energy providers work together to keep projects on track and deliver carbon reduction targets within the required timeframes?

GH: EDL is an Independent Power Producer (IPP). We work with customers to develop a solution to best suit their unique circumstances. EDL then owns and operates the facility to generate and supply power to the customer’s operation.

Optimizing renewable energy solutions is technically complex. There is a balance between the load that needs to be met; available resources; the capital cost of installing equipment on the ground and the ongoing operating cost. The challenge we face is the urgency to act and cut carbon emissions. By partnering with an experienced IPP, mining customers achieve optimized solutions and streamline development timeframes. Minimizing re-work and scope changes also reduces costs and time required to develop a new project. By taking these actions, emissions reductions will be achieved sooner and at lower cost.

Geoff Hobley, will be presenting “2030 is Looming: Fast-Tracking Renewable Energy to Meet Decarbonisation Targets at

LESSONS LEARNED FROM RECENT HYBRID PROJECTS FOR MINES

Reinhardt Labuschagne, Head of Mining at Aggreko APAC, discusses the challenges that are yet to be overcome and shares insights gained from the company’s more recent hybrid projects.

ENERGY + MINES: What are the biggest challenges mining companies are facing in trying to transition to renewable energy?

REINHARDT LABUSCHAGNE: Mines are facing a lot of uncertainty, with ever-changing technology and internal questions around whether the investment will meet the target decarbonisation goals.

Cost of ownership and life cycle reliability will also potentially play an important role in the decision, and due to the low maturity of the technology, the financial impact increases the risk of a project. At Aggreko we engineer and deliver projects that can help mitigate these risks and reduce the challenges faced by mines globally to transition to renewable energy.

EM: Can you share some key takeaways from Aggreko’s recent hybrid projects for mines, perhaps in terms of peak shaving and energy management?

RL: Aggreko has developed and implemented many hybrid projects for miners such as Resolute Mining, Gold Fields and more recently Rio Tinto in Queensland. From conducting these projects, we know that batteries and energy storage technologies in general are a great method to supplement the gap in baseload challenges.

This is especially true on power plants where medium speed or gas turbines are used and demand and peak management requires quick response without maintaining higher spinning

Hybrid power plants for remote mines have evolved greatly in recent years, with many miners choosing to add battery energy storage solutions to increase the capacity and reliability of their power systems. But high costs and remaining technical limitations still prevent more widespread adoption.

reserve. Coupled with a well-engineered hybrid or solar system, energy storage systems can help miners benefit from consistent reliable power with significant savings in daytime fuel costs.

EM: What are some of the remaining limitations of battery energy storage, and how are they being overcome?

RL: Some of the limitations preventing the widespread adoption of battery energy storage include a high levelized cost of energy (LCoE), limited life cycle/period, high Capex, as well as the fact that batteries are application-specific and present limited scope in terms of their operating environment, being vulnerable to high altitude, dust or heat for example. As a result, their uptake is still limited and confined to early adopters.

The good news is, we believe the technology will continue to improve and performance and price will stabilize thanks to the effect of economies of scale over time, making batteries much more affordable for many more use cases.

EM: How can the mining industry get to the next steps for decarbonising power?

RL: The best way to take your decarbonisation efforts to the next level is to partner with seasoned and forward-thinking partners like Aggreko that have the balance sheet, capacity

and capability to successfully include all the transitioning elements in one contract for our clients.

EM: What is the best decarbonisation shift for a remote mine: better batteries or mining differently?

RL: Mining differently with a focus on efficiency will be the first step for a remote mine, but the transition will also depend on the base load power generation. Aggreko can offer all these different configurations with tried and tested equipment and minimal capital investment. In fact, in recent years we have supported remote mines to achieve a renewable energy factor above 35% or more.

EM: What are the next technological changes that will make energy decarbonisation achievable?

RL: I think the technology that will make the biggest difference in the short term is engineered and well-configured microgrids. And in the long term, I hope to see greater availability of greener fuel, as we are lagging in alternative baseload generation options and this is slowing down decarbonisation.

In the meantime, some of our customers are choosing to integrate Aggreko’s gas power generation plants to provide decarbonisation gains with quicker returns, resulting in a major positive impact on their ESG ambitions and strategies.

Reinhardt Labuschagne, will be presenting Optimising Diesel Displacement for Remote Mines, on May 8th at Energy and Mines, Australia

No matter what your mining challenge, we power through it

Wherever your mine is located, you can rely on Aggreko to provide reliable power and temperature control solutions, quickly and affordably. With over 60 years’ experience, we provide turn-key services that grow with your mine throughout its entire life-cycle.

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