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Shutting down production to save money

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Whether scheduled or unscheduled, shutting down machinery is usually the last thing a miner wants to do. 

But United States-based Enernoc is paying more and more companies to do just that. 

Branching out into what has been a traditionally US-focused market, Enernoc works with electricity suppliers and consumers to ensure there's enough power avail-able in times of peak demand. 

Enernoc pays miners, and a range of other businesses, to use less power when the electricity grid is under stress, and the power supplier in turn pays Enernoc for delivering the service. 

"The simplest answer is that we're paying companies to not consume energy," Enernoc Australia and New Zealand director Jeff Renaud told Ferret

"The constraint is that usually a provider can't generate enough power at certain points in time and they need some way to deal with that problem." 

"They pay us to deal with it by reducing demand." 

"We then take the money the system operator has given us and share a portion of it with our portfolio of businesses." 

With some mining companies the experiment has been so successful it's been more profitable to shut down production and earn off Enernoc rather than produce ore. 

Renaud said Enernoc's Australian operations were most advanced in Western Australia, where they were dealing with five large mining companies. 

He said all three gold miners in their WA portfolio had decided that when Enernoc needed it, the most profitable thing they could do was halt production. 

"All three made the decision that the financial incentive for participating was sufficiently high that they could actually shut down gold production," he said. 

The catch is that when Enernoc needs what they call a 'demand response event' the shutdown time is between one and four hours. 

Unfortunately it's not possible to close the mine for weeks and make more money than when it's operational. 

Customers usually participate in demand response events for a fixed number of hours per year, with most signed on for 24 hours and some for a maximum of 48 hours. 

But full production shutdowns aren't the only way miners make money from saving electricity, and Renaud told Ferret most operations presented clear opportunities where some equipment could be switched off with no impact on production. 

"It's not going to be the case that everyone wants to shut down production and the reality is that there's a lot that can be done," he explained. 

"Demand response is usually a secondary consideration to shipping product out the door in the most profitable way possible." 

Renaud marked crushing and extraction as mining areas where there were "clear opportunities". 

"Waste water treatment is also something that can typically be curtailed for a few hours, especially if there's excess capacity and storage tanks," he said. 

"None of our customers would shut down thickening or agitation or things that have a long start up time to get them going again." 

The other opportunity is for businesses to schedule maintenance during demand response time to make the most of the downtime. 

He stated that "a lot of customers synch up their maintenance with demand response to hit two birds with one stone.". 

And Renaud said the impact on energy savings with this kind of business is not insignificant. 

"On the low end there can be a one to two per cent reduction on overall energy spent and on the high end it can be up to five or seven per cent." 

That's all the while getting paid by Enernoc and still focusing on hitting production targets. 

"None of our customers would be participating if the fundamental economic equation didn't make sense," he said.

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