Energy and Mines Issue 8

MARCH, 2019 - ISSUE 8

ENERGY STORAGE INNOVATION

HOW ENERGY STORAGE INNOVATION IS OPENING THE NEW ENERGY ERA FOR MINES

6 NEW PROJECT ANNOUNCEMENTS

NEW RENEWABLES IN MINING PROJECTS ANNOUNCED THIS YEAR

STORAGE

INNOVATIONS INNOVATIONS OPEN UP A NEW ENERGY ERA FOR MINES

By Melodie Michel, Energy and Mines

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STORAGE INNOVATIONS

These days, in conversations about energy for mines, storage is the name of the game. With renewable energy prices lower than they’ve ever been, the dream of a 100% renewable mine are becoming a reality, and storage is indispensable to such a project. At the same time, ongoing innovations in the storage sector have broadened the range of options available to mines. “The common misconception in the mining industry is that storage means batteries, but it’s much more than that, and the industry is moving quickly,” says Curtis VanWalleghem, CEO of Hydrostor.The following is a breakdown of the options available based on how and where they can be used.

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SHORT TO MEDIUM DURATION: BATTERIES The main way storage is currently used on mines is to optimize energy resources, by offsetting spinning reserves or achieving peak shavings. Both of these use cases require only a few hours of capacity, which is why batteries are the most prominent choice: easy to set up, they can provide anywhere from one to eight hours of stored energy for a large-scale user such as a mine, and their cost has reduced dramatically over recent years.

Lithium-ion is the best-known type of battery on the market, being the chemistry used in electric cars. The biggest advantage these batteries have is that the energy they store is very quick to be deployed, making it a great choice for offsetting spinning reserve.

Saturn Power is an energy storage provider that partnered with Hecate Energy and EllisDon Construction and Building Services to develop, engineer and procure Canada’s largest battery: a 40MWh device used by grid utility Festival Hydro in Stratford, Ontario. Adam Broadhurst, Business Developer in the company’s Energy Services department, says batteries can be particularly interesting in the context of safety on mining sites.

“There are a few things that miners always need to have running: communication and ventilation systems, as well as water pumping for example. They could put these battery systems on these applications and give themselves a couple of hours to keep running these systems if anything happens with the power,” he explains.

Lithium-ion battery providers are currently getting a lot of interest from miners in places where peak grid prices weigh a lot in global adjustment - Ontario being one of them. “Energy cost is the primary driver: global adjustment is C$500,000 to C$550,000 a MW/year, so every megawatt you can source from a different source, such as energy storage, during these peak times, you can take off of your bill. We then have an arrangement with customers to share that saving,” says Toby Titkinsky, Senior Vice President for Business Development at Convergent.

Regardless of which type of energy you initially store in the batteries, they can then be connected with renewable sources such as wind or solar, making them a good first investment for incremental greening of a mine’s power system. ABB, for example, has completed a project for an Australian mining company that uses energy storage as back-up to offset spinning reserves from a large gas turbine. “This one is quite important because it’s not around renewable energy, but

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STORAGE INNOVATIONS

“Energy cost is the primary driver... every megawatt you can source from a different source, such as energy storage, during these peak times, you can take off of your bill.�

Toby Titkinsky, Senior Vice President, Business Development, Convergent.

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“It actually then enables future renewable energy to be connected because you already have the system to manage fluctuations much better�

Juergen Zimmerman, Business Development and Technology Manager, ABB

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STORAGE INNOVATIONS

around offsetting spinning reserves from gas turbines. It actually then enables future renewable energy to be connected because you already have the system to manage fluctuations much better,” explains Juergen Zimmerman Business Development and Technology Manager at the company.

ABB is now working on a project with SunSHIFT on an offgrid mine site, using a combination of renewables, solar forecasting and a battery system to remove the need for diesel generation during downtimes. “This mine’s goal is to be 100% renewable during day time, though it’s not viable to store energy for the whole operation of the mine at night time,” adds Zimmerman.

Lithium-ion batteries are a long-established technology, which tends to give miners some comfort. But they do present disadvantages: small capacity, degradation over time and low resistance to extreme temperatures - a deterrent for many remote mines.

sauce, extra ingredient, no catalyst, makes it hands down the safest, cleanest battery on the planet. The chemistry is non toxic, you could pour it on the ground, put your hand in it, no issue, no liability.”

With four to eight hours of power available, the battery can bring diesel savings of 25% to 40%, according to him. ESS Inc is currently working with a mine in Australia facing a number of challenges: “When the weather is good, you can take two days to get there from the main city, but when the weather is bad you can only fly there. Building a largescale storage facility is almost impossible there for two reasons: getting people and construction equipment there is difficult, and the 10-year mine life makes building and dismantling costs prohibitive.” For this project, ESS plans to string together several containerised flow batteries and put them on a road train for transportation. Once the system is plugged in, the company can used filtered local water to make it work.

On top of being safer and having more capacity than lithium-ion batteries, flow batteries are a lot more durable: McDermott says Because of the limitations of lithium-ion batter- they can last almost five decades without deies, other technologies have been developed, grading, even with several cycles a day. This and flow batteries seem to be the most rele- means they could be moved to a different lovant solution to the mining sector. These can cation at the end of the mine life. use different chemistries including iron and vanadium, but are water-based, and therefore “The multi-layered capability of the flow batnon-flammable. “We only use three ingredi- tery is more suited to be a proper back-up in ents: iron, salt, and water,” says Hugh McDer- remote regions,” says Vincent Algar, Managmott, Senior Vice President of Sales and Busi- ing Director of VSUN Energy (part of Austraness Development at ESS Inc. “The fact that lian Vanadium), which has installed vanadiit’s only those three ingredients, no special um flow batteries on universities and farms in Australia.

NEW KIDS ON THE BLOCK: FLOW BATTERIES

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Flow batteries are facing an uphill battle in terms of competing with their better-known lithium-ion counterparts, but business is growing: from one battery installed two years ago, VSUN went to five in 2018, and expects more implementations in 2019.

the technology remains extremely expensive, and many miners are still concerned with the flammable nature of the particle.

Another solution is standing out as a better match, at least for the medium term: compressed air storage. “We take air from the atmosphere and compress it, and then we store that air the same way you would in tanks for scuba-diving,” explains VanWalleghem at Hydrostor. “But we store so much it would need a building-sized tank, and the cost would be phenomenal. So we store it underground about 400m deep, and then we use water to keep it under pressure.”

One project allowed a farm in Australia to go 100% solar and stop using grid electricity completely. “Lithium-ion batteries are high maintenance because they heat up and have to be monitored all the time, there are fire risks, a fixed life. You could leave out a flow battery in the shed and it would just carry on doing its thing - that’s one of the stronger points about a flow battery, it’s a very robust machine,” Algar explains.

Hydrostor has sold its solution to a grid power provider, but it required digging a shaft and However, energy stored in flow batteries is carving out the space needed underground. slower to be deployed than with lithium-ion, With mines, there is no such need: the compamaking them less adapted for surge demand. ny can use existing void space carved while At the end of the day, miners can create their digging out ore, which reduced the cost of the own custom mix of battery storage to maximize system. efficiency. “There’s a sweet spot in terms of the optimal configuration. Certain chemistries “You can store power for days,” VanWalleghem can act bigger than what they actually are, so adds. “That’s really what’s needed if an off-grid a 1MW lithium-ion battery might be that magic mine is going to go 100% renewables. But we solution for a wind peak, while a flow battery can also do that peak-shaving in the middle, might be better to store wind energy for lon- around three or four hours - that’s where storger in order to sell it at advantageous prices,” age technologies kind of intersect.” says McDermott.

LONG DURATION: COMPRESSED AIR While short-term storage can bring significant energy savings to a mine, going 100% renewable will take a much more powerful solution.

There aren’t many technologies out there that can store the energy required to maintain mining operations overnight or when the wind is down. Hydrogen solutions are being tested in some sites, including Raglan in Canada, but

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“The multi-layered capability of the flow battery is more suited to be a proper back-up in remote regions,” Vincent Algar, Managing Director, VSUN Energy

STORAGE INNOVATIONS

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THINGS TO CONSIDER SOFT COSTS Whatever the storage system, it’s important to plan for installation and interconnection costs, which vary greatly according to the location and grid provider. “That cost has nothing to do with the size of the system or storage asset. A 4MW system can be C$400,000 to C$500,000 in added cost just for the interconnection, when a 10MW can be C$100,000. The price is based on the utility, the state of the circuit and the individual utility’s approach to companies. So that’s been a challenge,” says Titkinsky at Convergent.

Depending on the system, there may also be the added cost of fire suppression equipment, safety corridors or ventilation: in Namibia, B2Gold recently decided the extra maintenance required for a lithium-ion battery made it cost-prohibitive on its Otjikoto solar farm.

LIFE OF MINE This must be the number one concern for miners considering a storage installation on their site, which is why durability is key. “We are in talks with a couple of mines that have the goal of going 100% renewables, but the issue that we’re having with the mining sector is: what’s the mine life? What I find is that when they’re designing a new mine, they’re thinking all about the ore that they’re trying to get out, the business case and how they can support it from investors, so they don’t really like to try something out of the box at that stage. Then they operate the mine for a

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couple of years and realize how high the energy costs are but by then, they already have all the equipment in place and only have 15 years of mine life left, so that’s not enough time to recoup the storage and renewables spending. We haven’t really figured that out yet,” says VanWalleghem.

Hydrostor has a business case for mines that are closing down, by offering to lease their facility to store and sell power to grid operators, saving miners decommissioning costs. In a recent case, the company was able to use the site of a mine reaching end of life to store power for a new one being built right next to it - a lucky strike according to VanWalleghem.

For all the others, balancing out storage costs with life of mine remains a difficult exercise.

CONTRACT STRUCTURE One way to deal with the life of mine challenge is to create a contract that removes installation costs - similar to a power purchase agreement (PPA). When VSUN installed its battery on the farm that went 100% solar, it did it through such an arrangement: “We charge the KWh they use at about 30% below the grid rate. I heard about a diesel provider supplying storage hardware to clients, with a power guarantee. If the power provider can see a benefit to buying a battery and redeploying it over four or five sites, then they can buy the equipment and run the power solution. That way, all there is is an operating cost.”

It is likely that independent power providers, including for renewables, will be the ones to take up the technology on broader scale and

STORAGE INNOVATIONS

“The common misconception in the mining industry is that storage means batteries, but it’s much more than that, and the industry is moving quickly” Curtis VanWalleghem, CEO of Hydrostor

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offer it to mines as part of their existing PPA which would be a great way to remove capital costs for mines and ensure more implementation in the sector.

diesel, you’re going to look like a caveman 20 or 30 years from now. I understand why that decision has been made for mines that are operating today, but when you’re planning a new mine, you’ve got to be thinking renewable enBut for all the innovation displayed by the en- ergy and electrification of your mining equipergy storage sector, there’s still a lack of vis- ment -- which means adopting storage,” conibility, especially for new technologies such cludes VanWalleghem. as flow batteries or compressed air storage.

2019 should see a few new use cases, and many experts expect storage to become mainstream on mines from 2020 onwards.

“If you’re building a new mine today that’s not connected to the grid and plan to ship in

Angas Zinc Mine, courtesy of Hydrostor

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NEW RENEWABLES

IN MINING PROJECTS

It was only a couple of years ago that new renewables in mining projects were few and far between; one announcement a year was about the average in 2013/14. This year already, we are aware of 6 new project announcements, the details of which are presented here. It’s an exciting time to be in this space. We hope to provide details and analysis of these projects over the coming months.

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6 NEW RENEWABLES IN MINING PROJECTS

• Mining Company: Barrick Gold • Mine: Loulo-Gounkoto Gold Mine, located 153km South from Kayes, Mali • Renewable Energy: Hybrid Solar/Diesel Power Plant • Date: Scheduled for Commission in Late 2020 • Details: As part of a wider cost-reduction and emissions management strategy, Barrick Gold is looking to take advantage of Mali’s abundant solar resource by installing a 24-megawatt (MW) offgrid solar hybrid plant at its Loulo-Gounkoto gold mine.

The mine, 80% owned by Barrick and 20% owned by the State of Mali, is forecast to produce 520,000-570,000 ounces of gold, at all-in sustaining costs of $810-850/oz, during 2019.

The addition of an off-grid solar photovoltaic plant will support the mine’s existing 63MW thermal power station and is expected to offset 50,000-megawatt hours per year (Wh/y) of thermal generation, saving Barrick over 10-million litres of fuel per annum and reducing the mine’s CO2 emissions by 42,000 tonnes over the same period.

The plant will employ cutting-edge weather prediction models to offset variability and allow the plant’s power management system to switch between solar and thermal generation systems without compromising the mine’s microgrid.

Barrick has already significantly cut its energy costs by utilizing hydropower generation in the Democratic Republic of Congo, local grid power in Cote d`Ivoire and heavy-fuel baseload generators at other sites in Mali.

The move towards increased use of renewable energy generation is part of a broader movement away from thermal power in Africa, where lack of reliable power transmission infrastructure has resulted in many mines needing to rely on self-generated diesel energy, making power generation their highest cost item.

Employing solar power at Loulo-Gounkoto offers both a tangible reduction on fuel costs and advances Barrick’s goal of 30% reduction in GHG emissions by 2030, from a baseline of 3.5 million tonnes of CO2e emitted during 2016.

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Navilawa Coldero photo courtesy Lion One Metals 18

Granny Smith Mine (photo courtesy Gold Fields)

6 NEW RENEWABLES IN MINING PROJECTS

• Mining Company: Lion One Metals • Developer/Installer/EPC: meeco Group • Mine: Tuvatu Gold Project, Located 24km Northeast of the Town of Nadi on the Island of Viti Levu in the Republic of Fiji • Renewable Energy: Hybrid Solar/Diesel Power Plant • Date: Currently Not Disclosed • Details: Canadian-based Lion One Metals have partnered with Swiss-based clean energy provider the meeco Group to build and install a hybrid solar and diesel power plant that will provide power to the Tuvatu Gold Project on the Fiji Islands.

Sitting on a sizeable gold-bearing vein system hosted in the eroded remnants of the Navilawa volcano, the Tuvatu mine represents the largest undeveloped gold project in Fiji and one of the highest-grade gold projects anywhere in the world, with a recorded resource estimate of 1.101 million tonnes.

Currently, the processing facility at Tuvatu is designed with a nominal capacity of 219,000 tonnes per year (t/y) for a nominal design rate of 600 tonnes per day (t/d) based on an overall availability of 91% with a life of mine average feed grade of 11.3 grams per tonne (g/t) of gold.

The addition of the solar hybrid plant is part of Lion One’s broader plans to build production at the site to 100,000 ounces per year (oz/y) over the next ten years.

The hybrid plant will make use of meeco’s 7MW peak “sun2live” solar power generation system. The solar plant will be coupled with diesel generators to generate up to 11MW peak power production, with the power generated from the new solar plant providing a constant 24-hour source of energy for both the gold mine and processing plant.

The plant itself, which will be built on 4.1 hectares of unused land 3.5km from the Tuvatu Gold project, will have an estimated annual energy production of approximately 10.31-gigawatt hours (GWh) displacing more than 6,000 tonnes of CO2 emissions per annum.

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Photo courtesy GoviEx 20

Granny Smith Mine (photo courtesy Gold Fields)

6 NEW RENEWABLES IN MINING PROJECTS

• Mining Company: GoviEx • Developer/Installer/EPC: Windiga Energy • Mine: Madaouela Uranium Project, Located Approximately 9km Southeast from the Town of Arlit, Niger • Renewable Energy: Hybrid Solar/Diesel Power Plant • Date: Feasibility Study Ongoing Details: Canadian uranium miner GoviEx Uranium Inc has signed a Memorandum of Understanding with Windiga Energy Inc that will see the companies jointly evaluate the feasibility of powering the GoviEx’s flagship Madaouela Project using a hybrid solar/diesel power generation solution.

Windiga, a Canadian-based independent power producer, is currently conducting a feasibility study into powering both the Madaouela Project and the local community through the installation of a combination of solar photovoltaics (PV) and diesel generators with a combined capacity of at least 20MW. Located in the Southeast of Niger and connected to the so-called “uranium highway” the Madaouela Uranium Project has one of the largest sandstone-hosted uranium deposits in the world. The mining permit for extraction was awarded to GoviEx by the Niger government in early 2016 and mining operations are expected to start at the site in 2020.

Production at the sites is envisaged at 2.69 million pounds per year (Mlb/y) of U3O8 yellowcake uranium, with a 93.7% ultimate recovery and an 18-year mine life. The cash operating costs for the site sit at a predicted $31.49/lb of U3O8 including royalties.

With the introduction of a solar hybrid power plant, GoviEx expects to be able to provide sustainable, renewable power to the Madaouela mine at an approximately 25% lower cost than traditional coal-fired options currently available in Niger, allowing for substantial savings on operational costs and a reduction in carbon dioxide emissions of more than 20,000 tons per annum.

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Photo courtesy Gold Fields 22

Granny Smith Mine (photo courtesy Gold Fields)

6 NEW RENEWABLES IN MINING PROJECTS

• Mining Company: Gold Fields • Developer/Installer/EPC: Aggreko • Mine: The Granny Smith Gold Mine, Located 21km South of Laverton, Western Australia • Renewable Energy: Solar/Storage • Date: Construction to Begin in May for Completion in Q4 of 2019 Details: South African miner Gold Fields has partnered with Scottish power company Aggreko to install one of the world’s largest renewable energy microgrids as part of a solar hybrid power solution for its Granny Smith gold mine in Western Australia.

The proposed 8MW solar power generation system will comprise a renewable microgrid composed of over 20,000 solar panels, supported by a 2MW battery system. The complementary battery storage will power additional services such as photovoltaic ramp rate control, transient voltage and frequency support, and spinning reserve displacement.

The solar microgrid will be integrated with Granny Smith’s existing thermal power station, also designed and installed by Aggreko, in order to meet the site’s 24.2MW daily power requirements.

12.2MW of that power being allocated to the Wallaby underground mine and the remaining 12MW to the processing plant, associated facilities, and mining camp.

Current estimates from Aggreko forecast that, once operational, the new solar power plant could reduce fossil fuel consumption at the site by up to 13 percent, while also generating around 18GWh of clean, renewable energy each year.

The move toward solar generation at Granny Smith comes at a time when the Australian Energy Market Operator predicts that 70 percent of all coal-fired generation capacity in Southern Australia will be retired by 2040.

With the cost of PV modules falling by 3 to 8 percent each year, and commercial battery storage projected to decline from USD$250/ kWh in 2017 to USD$73/kWh by 2040, the addition of hybrid power solutions to mining sites could save operators up to 75 percent on fuel costs.

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Prieska Zinc Copper Mine Site - photo courtesy of Orion Minerals

Granny Smith Mine (photo courtesy Gold Fields)

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6 NEW RENEWABLES IN MINING PROJECTS

• Mining Company: Orion Minerals • Developer/Installer/EPC: Juwi • Mine: The Prieska Zinc-Copper Project, Located 270 Km Southwest of Kimberley in the Northern Cape Province of South Africa • Renewable Energy: Solar and Wind Hybrid Power Plant Date: Feasibility Study Ongoing • Details: Orion Minerals has recently finalized a collaboration agreement with juwi, to investigate the feasibility of generating and supplying Orion’s flagship Prieska Zinc-Copper Project with renewable energy.

The Prieska Zinc-Copper mine sits on top of one of the world’s largest volcanogenic massive sulphide (VSM) ore deposits, with an established production history of over 430,000 tonnes of copper and more than 1-million tonnes of zinc.

As part of Orion’s current focus is on fast-tracking their Prieska Project to production, juwi are currently investigating the possibility of constructing a hybrid power system, using integrated wind and solar technologies, that will supply the Prieska site with 35MW of electricity.

The area around the Prieska Project is well suited to both wind and solar generation, with some of the highest irradiance levels in the country coupled with a generally hot and dry climate.

Renewable energy generation is already well established in the Kimberley region, with 190MW of solar power plants currently in operation and a 240MW of wind power projects currently under construction immediately adjacent to the Prieska Project.

The addition of a wind/solar hybrid solution will allow Orion to secure the Prieska Project’s long-term power supply security in addition to reducing the burden on the national electricity grid and reducing the project’s carbon and water footprint.

Alongside the benefits of enhanced energy security and reduced CO2 emission, the development of the renewable energy potential of the region falls in line with the Siyathemba Municipality’s Integrated Development Plans.

Orion, juwi and local government have already signed a collaboration agreement in order to maximize employment and development opportunities in the local community.

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Photo courtesy Millennial Lithium Corp

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Granny Smith Mine (photo courtesy Gold Fields)

6 NEW RENEWABLES IN MINING PROJECTS

• • • • •

Mining Company: Millennial Lithium Corp Developer/Installer/EPC: Ergy Solar Mine: Pastos Grandes Salar Lithium Brine Project, located approximately 230km west of the city of Salta in the Puna region of northwest Argentina Renewable Energy: Hybrid Solar/Diesel Power Plant with Battery Storage Date: Commissioning is expected to be completed by March 7th, 2019 Details: Vancouver-based Millennial Lithium Corp has contracted Salta-based Ergy Solar to install and commission an integrated solar PV, battery storage and backup conventional power system for an on-site permanent Project Center at its Pastos Grandes Salar Lithium Brine Project.

The Project Center will include a fully equipped accommodation camp for up to 100 people, an on-site laboratory and a process plant which is expected to be commissioned in Q2, 2019.

In an effort to reduce both power cost and CO2 emission, the Project Center will be powered by 540 (1,050 square meters) photovoltaic panels of 330-watt peak capacity (Wp) each totaling 178.2 kilowatt-power (KWp) of solar power. The solar panels will be hybridized with a 500 kilowatt-hour (kWh) maximum storage bank of batteries and two low-emission diesel generators.

A “smart” central controller will manage the solar hybrid system in order to optimize power output to the Project Center. The PV panels and battery system will be able to provide power to the Center at maximum capacity for more than 18 hours of the 24-hour cycle.

The diesel generator back-up will be used only during select peak energy consumption periods and rare non-sun events.

The proposed solar hybrid system will be the first of its kind in the Puna region of Northen Argentina and will allow Millennial to both reduce CO2 emissions from the Pastos Grandes Salar and significantly reduce the project’s operating costs.

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With the Federal Backstop and provincial carbon regulations coming into effect, Canadian industry is being challenged by new benchmarks, timelines, pricing and rules.

CARBON PRICING FOR CANADIAN INDUSTRY, APRIL 25-26, HILTON TORONTO, will provide energy intensive industries with critical insight on benchmarking carbon strategies and managing compliance across Canada.

For full event details, visit: https://carbon.canadianclean.com Organized by Canadian Clean Energy Conferences

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