Renewables & Mining: A Tremendous Opportunity or a Huge Misunderstanding?

Dr. Thomas Hillig – THEnergy – Toronto 12/09/2015

Background THEnergy

Distributors

Manufacturers of complementary mining solutions

Storage manufacturers that actively target mining

Innovative EPCs

IPPs / Leasing companies / external

project investors

Banks

Logistics / container & mounting system providers

PV-module & inverter manufacturers

End users such as mining companies

Excellent network through online platform and numerous publications

Select media with articles about THEnergy content

Background THEnergy

Types of renewables at mines

Off-grid: hybrid installations / minigrids - micogrids

Grid-connected installations with PPAs from mines

Renewable power plant on reclaimed mine sites

Wind

Solar(PV /

storage / CSP)

Hydro BiomassGeo-

thermalTidal / wave

Introduction

Introduction: Price of renewable energy

Introduction: Project examples off-grid / in-site renewable energy

Country Location Year Type Size [MW]

Mining company

ARGENTINA VELADERO 2008 WIND-DIESEL 2.0 BARRICK GOLD

CHILE EL TOQUI 2011 WIND-HYDRO-DIESEL 1.5 NYRSTAR

MAURITANIA NOUADHIBOU 2011 WIND-DIESEL 4.4 SNIM

SOUTH AFRICA THABAZIMBI 2012 PV-DIESEL 1.0 CRONIMET

CANADA LAC DE GRAS 2012 WIND-DIESEL 9.2 DIAVIK DIAMOND (RIO

TINTO)

CANADA KATINNIQ 2014 WIND-DIESEL 3.0 GLENCORE

AUSTRALIA WEIPA 2015 PV-DIESEL 1.7 RIO TINTO

AUSTRALIA DEGRUSSA MINE 2015 PV-DIESEL-HYBRID 10.6 SANDFIRE RESOURCES

TOTAL 33.4

Source: THEnergy plant database for “Renewables & Mining”http://www.th-energy.net/english/platform-renewable-energy-and-mining/database-solar-wind-power-plants/?CT

COUNTRY LOCATION YEAR TYPE SIZE [MW] MINING COMPANY

CHILE PUNTA COLORADA 2011 WIND 20 BARRICK GOLD

CHILE EL TESORO 2012 CSP 10 MWTH EL TESORO

CHILE CODELCO 2012 PV 1.1 CODELCO

CHILE ANDACOLLO 2013 PV 1.3 MINERA DAYTON

CHILE EL ÁGUILA 2013 SOLAR 2 QUIBORAX

CHILE EL ARRAYÁN 2014 WIND 80.5 ANTOFAGASTA MINERALS

CHILE POZO ALMONTE, TARAPACÁ

2014 PV 25.4 COMPAÑÍA MINERA DOÑA

INÉS DE COLLAHUASI

CHILE COPIAPO 2014 PV 100 CAP

CHILE JAVIERA 2015 PV 69.5 ANTOFAGASTA MINERALS

Source: THEnergy plant database for “Renewables & Mining”http://www.th-energy.net/english/platform-renewable-energy-and-mining/database-solar-wind-power-plants/?CT

Introduction: Project examples grid-connected renewable energy

Why is mining interesting for renewable energy players?

High energy consumption of mines

High electricity prices at remote locations

Multinational mining companies are considered as a reliable partner

Why mining?

What could make solar and wind so attractive for mining companies?

Solar and wind allow often for significant cost savings

Energy typically between 20% -35% of total operational costs

Improving company image regarding sustainability (CS)

Why solar and wind?

Positioning as progressive, forward looking toward investors

Basic concept solar diesel hybrid without storage

Source: DHYBRID

Source: Siemens AG

Basic concept solar diesel hybrid with storage

Mining company

At mine

Electricity consump

Electricity prod.

Different location

Mine is operator

Other operator

No ownership

Co-ownership

Rental / leasing

Energy-metal-SWAP

Synthetic PPA

Load-profile mine

Lifetime of mine

Grid-connection

Electricity prices

Diesel prices

Transport costs

Wind- / sun cond.

Genset charact.

Land availability

Ownership

Country risk

Interest rates

Energy = core comp?

Grid-stability

Wind

Solar-PV

Solar-thermal

Process-heat

Turnkey

Consignment

Standard PPA

Sustainability policy

Mechanical st.

Battery storage

Self-consumption (plant ownership)

Power Purchase Agreement (standard PPA)

Synthetic PPA

Business models

Co-ownership (joint venture)

Leasing or rental agreement

Energy-metal-SWAP

Barriers

Cultural

Financial

Technical

Cultural• Wind / solar companies considered as environmental activists & not reliable

partners• Short vs. long term thinkingFinancial• High investment costs• Rather small size of installations for institutional investors• Higher risk for hybrid in remote installations• Risk due to consequences of production downtimes• Many mining companies need capital for investing into core processes• Country risksTechnical• Mismatch of lifetime of mine and renewable energy plant• Fear of over-engineering• Missing track-record of storage and hybrid controllers• Often an unreliable grid is main problem – standalone gensets are solutionOther• Low oil price• Difficult sales process incl. due diligence of mining operations for PPA• Existing contracts for gensets / diesel

others

Hybrid markets: Developments

Hybrid markets: Cooperations

Contact details

THEnergycontact: thomas.hillig@th-energy.net

Newsletter: http://www.th-energy.net/newsletter-1/