CONTENT POD 2: South America: 100% Renewable Energy Mining

SOUTH AMERICA: 100% RENEWABLE ENERGY MINING

The Energy and Mines Virtual World Congress second content pod focused on the world-leading decarbonization strategies of South American Mines. Sharon Mustri, Analyst at Bloomberg New Energy Finance (Bloomberg NEF), set the scene with facts: renewables are the cheapest form of energy generation in South America, and miners have caught on to it. Three of top 10 off-takers of renewable energy in Latin America in 2020 were miners. Taking advantage of market-friendly regulations and commercial innovation such as sleeved PPAs, miners are shifting away from regulated markets and procuring cheaper energy from wholesale markets or through bilateral agreements: Solar PV’s levelized cost of energy in Latin America is US$59/MWh and wind is US$45/MWh, which is much lower than average industrial power prices of $100 or above. Meanwhile, for on-site generation, renewables are cost-competitive at 30-60% penetration.

COMBINING PPAS AND SELF-GENERATION

Two miners that have led the switch to renewable PPAs in the region are BHP and Anglo American. BHP sourced 600MW of renewable contracts in Chile in 2019, and Sebastian Rivas, Lead, Energy and Water Management, Strategic Services, at the company, explained that behind-the-meter selfgeneration is also being considered to reduce transmission and ancillary services cost. In Brazil, Anglo American has procured 165 MW of wind and 70 MW of solar energy in the past year, corresponding to 70% of its total power consumption in the country. According to Alfredo Duarte, Global Supply Manager, Energy and Utilities, the company is currently negotiating more contracts that will bring its Brazilian energy mix to 96% renewables. “With the three electricity supply contracts recently closed, we will stop emitting 1 million tonnes of CO2 per year, and have achieved a 20 to 30% reduction in power costs,” Duarte said. Meanwhile, Teck Chile is also procuring renewable energy to meet increased power needs once its Quebrada Blanca Mine expansion is complete. The company expects to have moved to 100% renewable energy PPAs by 2025, and is also considering producing its own clean energy on site.

ENERGY AND WATER EFFICIENCY

In a panel moderated by ABO Wind’s Head of Hybrid Energy and Battery Storage Systems Julia Badeda, regional miners pointed out that whether they look towards electrification or hydrogen to displace diesel in mobile equipment, more power will be required, which is why their first priority is improving energy efficiency and accessing cheap sources of renewables.

Because of its abundance of cheap renewable energy, Latin America (specifically Chile and Brazil) is also expected to become the world’s lowestcost producer of green hydrogen. In fact, Bloomberg NEF predicts that by 2030, more renewables will be used to produce green hydrogen than for power consumption in the region. This will bring the focus on water management, since electrolysis requires a lot of clean water. At BHP Chile, the target is to cease the use of continental water by 2030 by reducing consumption and installing desalination plants — which come with their own energy consumption. In Chile and in the rest of the region, renewables, diesel displacement through hydrogen, and water management are all intrinsically linked.

SPONSORS’ CORNER

Global Affairs Canada reminded the audience of Canada’s commitment to be the most competitive jurisdiction in the world for cleantech, with the Trade Commissioner Service ready to support Canadian companies’ internationalization.

Heliogen argued that concentrated and refined sunlight could be turned into cost-effective, 24/7 energy, solving intermittency issues and bringing modularity to the renewables equation.