20 Potential Hybrid Projects in the Pipeline

Energy and Mines caught up with Aggreko’s Global Vice President Sales - Microgrids and Storage Solutions, Dean Tuel on the microgrid market in Australia.

Energy and Mines: How would you describe the current energy landscape and challenges for Australian mining operators?

Dean Tuel: The primary goal for mining operators has evolved from not only ensuring the reliability of energy but to also lowering the overall cost of energy that is more environmentally friendly which in turn reduces the dependence on infrastructure. In addition, we are seeing mining operators prefer a single contracting entity that can fully wrap a hybrid solution and do so with shorter terms.

Energy and Mines: Can you give us an update on your most recent hybrid projects for global mining clients?

Dean Tuel: We currently have over 20 potential hybrid projects in the pipeline that are in various levels of maturity, not including early development projects. There is a high level of interest within the mining sector and this sector makes up approximately 50% of the 20 projects. The Gold Fields’ Granny Smith 8MW solar and 2MW energy storage project is expected to begin construction onsite in early June and is a major milestone for the company in showcasing our hybrid offerings.

Energy and Mines: What is significant about these recent projects - how is the approach to hybrids changing for mining?

Dean Tuel: The appetite for hybrid power solutions within the mining industry is increasing due to: 1) The reduced risk for these off-grid locations i.e. the logistical requirements to support the transportation of fuel etc.; 2) The reduced risk to volatility of fuel prices over long term operations 3) Decreasing emissions 4) Decreasing the cost of energy

All these factors can now be achieved on a cost competitive basis and with Aggreko we can provide this as a fully packaged solution with little to no CAPEX at risk.

Energy and Mines: What type of fuel savings are mines now realizing from integrating these technologies?

Dean Tuel: The level of saving is highly dependent on the fuel cost. But we see anywhere from 2% to 15% p.a. When looking at 2%, which is at the lower end, we can still realise significant savings depending on the size of the load being supplied over the life of the mine. If we then incorporate solar, the savings can drastically increase to up to 30% for fuel savings depending on the underlying fuel cost.

Energy and Mines: What are the main drivers for these recent projects?

Dean Tuel: The main drivers for the recent hybrid projects is definitely the cost of energy.

Energy and Mines: More broadly speaking, what sort of feedback are you having from other mining clients on their interest and assessment for investing in hybrid solutions?

Dean Tuel: Almost all of the mining clients we speak to are moving as fast as the process allows them to fully assess hybrids as an alternative to traditional power solutions.

Energy and Mines: How do renewable energy hybrids fit with other key energy initiatives for mines including electrification and decarbonization?

Dean Tuel: Primarily we are seeing internal mandates or goals set by mining companies and their boards to hit a % of energy supplied by renewables target. This can typically be up to 25% over the next 5 to 10 years and varies firm by firm.

Energy and Mines: Where do you see the best business opportunities for renewable microgrids for mines?

Dean Tuel: The best opportunities for renewable microgrids for mines exist in Australia, Canada, Argentina, Africa and certain parts of Mexico with high fuel prices.