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Power Genera*on @ Remote Mines
Factors Driving Power Plant Assessments
§ Independent advice avoids prejudiced advice
§ Life Cycle Cost (LCC) - fuel cost is most important
§ Reducing emissions
§ Adding renewables, when financially viable
§ Challenging the accepted norm
§ Every project is different – preliminary desk top study useful.
So what is the cost of power? § for remote, off grid applications, it’s quite high § Most mines take the path of least resistance, i.e., diesel generated power
because it’s readily available, low capex, requires little support infrastructure or ‘engineering’ and it’s reliable.
§ diesel generators consume ~270 litres/MWh & are ~32% efficient. § cost of diesel in Africa currently ~$1.00/ litre, of which 68% is thrown away in
waste heat. Huge risk of oil price and/or govt. duty hike! § a typical power plant at a small gold mine with a processing plant and ball mills
running continuously at 6MW: § 39,000 litres /day, 273,000 litres per week, § at US$1.00/ litre = US$39,000/day, or $273,000/week = $14M/year
§ compare this to subsidized grid power in Tanzania = US$0.16/kWh. But with frequent outages, unstable voltage and limited distribution.
$0.27 $0.08 $ 0.35/kWh
Diesel Fuel Rental
q Desk Top Study: § cost and availability of fuels &
power production technology, including diesel, HFO, coal, gas, HEP, solar pV
§ Assess rental versus purchase - Capex versus Opex
§ Economic impact § Logistics
Shanta Mining Company Ltd, New Luika Mine, Tanzania
q New Luika Gold Mine flagship project in production since August 2012.
q Energy cost from diesel fuel rented power plant represented 1/3 of process plant CoP & fuel cost represented ~80% of this.
q MCD carried out a desk top study to determine options for reducing energy costs.
§ Why? § Determine opportunities § Evaluate potential savings § Eliminate non-viable
alternatives § What?
§ Fuel source and Logistics § Appropriate technologies for
the load. § Hybrid opportunities
§ How? § Configuration § Fixed & variable costs § Rent vs. procure
Desktop Study - New Luika Mine
New Luika Mine
• In remote SW area of Tanzania with 4MW intermi:ent grid power within 5km. Originally 5MW Rented Island (Diesel) Power Plant. ConsumpGon 24,000MWh/annum rising to 48,000MWh/annum. 2.5MW demand rising to 5MW.
• Unique situaGon: Generalised soluGon impossible. Required unbiased and comprehensive understanding of cost/suitability of alternaGve energy soluGons from the myriad of opGons punted by enthusiasGc salesmen.
• Feasibility study evaluated opGons à informed decision based on true Life Cycle Cost (LCC) of the energy.
• Investment decision easier if oil prices stable & if LCC of renewable energy was lower. De-‐risked only from detailed assessment of mine demand characterisGcs, unbiased advice from independent power consultants, mine visits & a study of the literature and the commercially available mature technologies. Understanding of why each power plant technology was chosen helps to discern appropriate soluGons.
• Renewable energy storage cost usually prohibiGve & power output varies, hence Island Power Plant must provide 100% of MD & renewable energy costs must compete with the variable cost of the IPP energy.
Modified to Hybrid HFO & Diesel + Solar PV Power
q Originally 6 x 0.9MW diesel genset rented Island Power Plant.
q Converted to 4 x 0.75MW HFO gensets + 2 x 0.9MW diesel gensets
q Solar PV pilot plant added -‐ 50t/annum CO2 reducGon from only 63kW installaGon.
q Solar PV Fully scalable -‐ No costly energy storage
q The first Hybrid HFO + Solar PV power plant at a mine
q HFO @ $0.66/L cf Diesel @ $0.97/L, i.e., fuel cost saving of 32%
q Reviewing opGon to extend to 5MW Solar PV, saving $1M to $2M over 5 years
Redavia pilot Solar PV farm on PPA
• No foundaGons – only needs level cleared area near to feed-‐in point
• 3 mth trial period prior to acceptance, or return
• 2 year PPA contract, inclusive of supplier operaGon & maintenance
• Integrated with Island HFO Power Plant
• Fully scalable if future uprate required
Alterna*ve Energy
§ Base Load Technology: § Diesel >>> HFO: Reduces LCC to $0.26/kWh ($0.20/kWh once capex
repaid) § Waste Heat Recovery: 5% – 10% fuel saving? § National Grid: Requires Conditioning & Ride-Through – 4MW @ $0.16/
MWh?
§ Hybrid technology § Hydroelectric – 5MW PPA – run of river from nearby seasonal river @
$0.21/MWh § 5MW Solar PV > PPA @ $0.15/kWh
$0
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2015 2016 2017 2018 2019 2020 2021 2022
ENER
GY CO
ST PER
ANNUM ($
M)
ANNUAL
ENER
GY CO
NSU
MPT
ION (M
Wh)
YEAR
ANNUAL ENERGY USAGE & COST BASE CASE 50ktpm
RENTAL ENERGY COST HFO ENERGY COST Energy Consump*on
RENTAL ENERGY COST IS HIGHER FROM 2017
ONWARDS
EXCLUDING RESIDUAL VALUE OF HFO PLANT
2015 – 2022 LoM
2015 – 2022 LoM
Operating Lease - Medium Speed HFO FOR AGAINST
Low Risk – scalable, proven technology High fuel cost compared to coal, hydro and solar
Good residual value -‐ especially for containerised plant Gov't fuel duGes could be increased to discourage imports & improve balance of payments.
Lowest capital cost -‐ Opera*ng Lease off Balance Sheet Fuel price subject to exchange rate fluctuaGons.
Large saving cf compared to rented diesel power plant. AddiGonal site fuel storage facility required
Coal/Steam/Turbine Genset FOR AGAINST
Low Risk -‐ proven technology Limited residual value
Abundant acceptable quality local coal Very High capital cost
Largest energy cost saving cf rented diesel power plant. Requires 100% diesel back-‐up.
PPA Coal/Gasifier/Gas Genset FOR AGAINST
Low Risk – scalable, proven technology Must commit to 8yr contract at minimum ojake
Abundant acceptable quality local coal Technology more suited to grid supply -‐ Step Load Capability/Standby provision
Large energy cost saving cf rented diesel power plant.
Thank you
Questions?
Manuel Duggal MCD International Energy
Solutions
[email protected] Tel: +44 7795 421460
www.mcd-energy.com
Ian Fielding Shanta Mining Co. Ltd.
Tel: +255 767 975 479 www.shantagold.com
