Mining companies are always looking for the most cost and energy efficient power solutions to lower energy costs. They also want to minimise the use of diesel generators to reduce their carbon footprint, but how can they do it in this era of high power costs?
Australian Mining spoke to solar photovoltaic (PV) manufacturer First Solar about how solar power is providing a compelling economic solution to a sector facing the challenges of high diesel fuel costs.
Vice President of First Solar Asia-Pacific Jack Curtis said while the economic advantage of solar PV is not a revelation, the real challenge solar power faces is its technical integration with existing power generator systems.
“As you would be acutely aware, the main concern for mining companies is that their mine runs 24/7. And obviously solar PV is reliant on the sun to generate power.
“What the gap has been to date is helping mining companies understand how solar PVs can integrate with existing power generation sources, which would provide an economic value without disrupting the continual supply of power to the mine,” Curtis said.
According to Curtis, the buzz around solar PV has been around for the past two to three years but has really accelerated in the last 12 to 18 months. Mines are now showing a proactive interest in incorporating solar PV on their sites.
The driver of this has been the cost of diesel fuel, which is now having a high enough impact on the mines’ profit and loss profile for miners to consider alternatives, Curtis said.
The carbon tax also drives miners to think about solar power. As Curtis pointed out, once solar PV is installed in a mine site there are no long-run fuel costs associated with it.
“And so what we’re starting to see is a number of companies that are looking at it as a hedge against future increases in liquid fuel costs.
“I think the other key driver is mining companies are certainly looking to improve the environmental profile of their operations and obviously solar PV contributes to that as well,” he said.
There are also health issues related to the use of diesel fuel.
The World Health Organisation released a report linking diesel fumes with cancer, posing the same risk as second hand smoke.
A science panel welcomed the decision to change the status of diesel fumes from ‘probable carcinogen’ to carcinogen.
This is particularly pertinent to the mining industry, with workers exposed to large amounts of diesel fumes, especially in underground mines.
It's on the same order of magnitude as passive smoking," Kurt Straif, director of the International Agency for Research on Cancer (IARC), said at the time.
"This could be another big push for countries to clean up exhaust from diesel engines."
Solar system integration
The arguments for using solar power sound compelling but Curtis believes the real challenge is less about the technology and more about integrating an entire solar system, especially if miners are seeking to combine it with existing power generation equipment.
“We’re certainly not advocating that miners rip out the diesel generation sets and diesel reciprocators and replace it with a solar plant but what we need to occur is integration between the two solutions where solar PV can make a significant penetration into diesel,” Curtis said.
Curtis said First Solar can offer a “turnkey” solution, where they can carry out the construction and the integration of a solar plant.
He said miners want to work with a company that has a comprehensive understanding of not only the solar system but also the “complete hybrid package”.
First Solar has a fully vertically integrated capability, and the company has expertise in both the solar system and the diesel side of the equation.
Integrating the solar system with an existing power generator involves moderating the solar generation profile to ensure the diesel side can react to that on short notice so that there is continuous power supply.
The crux of the technical integration piece is to ensure the solar generation and diesel generation works together seamlessly so one can ramp down when the other ramps up and vice versa.
Many Australian mines are located in fairly hot conditions, especially in South Australia or Western Australia. First Solar’s solar panel has certain characteristics in its semi-conductor materials that produces more energy during hot days compared to other crystalline panels.
Although hotter temperatures might lead to the gradual, temporary degradation of solar panels, First Solar’s panels are driven by a temperature coefficient, which means the panels degrade a lot less over the course of a hot day.
“And what that translates to is, as it gets hotter you get more energy out of the panel over the course of the day,” Curtis said.
“And what that ultimately translates to is better economic proposition for the mine.”
Baby steps towards solar
Many mining companies may be reluctant to get on board solar energy as they may be apprehensive about its reliability and consistency.
Curtis said he does not expect mining companies will entertain high penetration of solar into their mine sites right off the bat. He believes solar can have a 70 per cent penetration of the mine’s load while the sun is shining.
But he expects mines will start at a more conservative level of 20 per cent generation profile during the day, with diesel providing the balance. It can ramp up to 100 per cent during the night to keep the power supply going.
He believes once mining companies develop a level of comfort and understanding of solar energy, and see that it does not disrupt a continuous power supply, solar energy can gradually increase penetration.
Upkeep & cost
In terms of maintenance, there are no moving parts. It requires basic upkeep, which is usually done from a remote monitoring station.
Power is usually calculated on cents per kilowatt hour or dollars per megawatt hour basis. Mining companies will have a thorough grasp of the cost of power on a kilowatt basis.
From a cost point of view, First Solar would like to translate this as litres of diesel fuel saved for mining companies.
“What we’re really trying to do is deliver a solution that says the cost of building the solar plant is ‘x’. It’s going to deliver power at a cost of ‘y’. But what it’s really doing is saving you ‘z’ as it relates to the cost of diesel fuel on a per litre basis,” Curtis explained.
“It’s a very easy analysis for them to perform as it relates to how much money they’re actually saving.”
Curtis estimates the general cost is between $2.50 and $3 on a per watt basis. The cost will be at the higher end of this range for remote mines.
First Solar is looking at providing mines with a power purchase agreement where companies just have to purchase the energy from the plant without having to get involved in the initial capital outlay.
“That avoids the need for mining companies to deploy their own capital or tie up their own balance sheet for the purpose of the initial capital outlay,” Curtis said.
First Solar’s next step is to validate its power generation this year. It hopes to roll out in the first half of next year.
Others in the business
Australian Mining spoke to Photon Energy earlier this year, which also offers off-grid solar power solutions for mining companies.
“The solar potential in Australia is huge, not harnessing it with today’s technology is just pure wasteful,” Photon Energy’s Australian managing director Michael Gartner said.
Another company won an award in 2011 for its solar tracking panels at its Mt Cattlin lithium mine.
Galaxy Resources won the Energy Generation and Distribution Award from the Sustainability Energy Association of Australia.
The mine site had solar tracking panels created by Swan Energy, which followed the sun in all directions to generate 15 per cent more power than a single axis system.