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Renewable energy an enabler for remote mines

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Release by Scatec is ideal for remote mining locations in Africa. Image credit: Scatec Release

By Leon Louw, founder and editor of WhyAfrica

20 June 2021 – Renewable energy has become a key enabler of change as the movement towards a greener future gathers momentum. Renewable energy  is now a key enabler for remote mines . 

With the emphasis on Environmental and Social Governance (ESG), mining companies are scrambling to find the most reliable and cost-effective energy solutions to offset any adverse impacts their operation might have on the environment. Renewable energy could become a key enabler for remote mines in Africa.

Most remote mines in Africa operating off-grid are dependent on fossil fuels as the main source of power. Diesel or gas generators are effective in these harsh environments, but in the long term, extremely costly to operate. Moreover, a reliance on diesel fuel only, might become a liability in a new normal where shareholders, and funders, consider ESGs first and not increasing dividends and profit margins at all costs. The carbon emissions and other environmental impacts associated with fossil fuels are significant and might count against a mining operation in the future.

As all executives and project managers that have built mines in remote Africa know, one of the primary challenges is getting large plant and equipment to site, or re-assembling components after delivery. This is also the case when setting up or constructing a renewable energy system like a solar plant or some form of hybrid solution.

Mining companies cannot choose where the mine will be located. The best mineral deposits are often found off the beaten track, with limited access in terms of roads and other enabling infrastructure. In an ideal world the plant is pre-assembled and transported to the end destination, which will then cut short the installation time and reduce the number of people normally needed to construct the modules, once it has arrived on site.

Dealing with the challenges 

According to Hans Olav Kvalvaag, SVP Release at Norwegian headquartered renewable energy specialist Scatec, the key challenges when setting up renewable energy facilities in remote regions of Africa, are mostly related to transportation and logistics on site. Scatec is no stranger to Africa, and has developed, build, financed and operated more than 1GW of solar PV and hydro projects in, amongst others, South Africa, Mozambique, Rwanda, Uganda and South Sudan. 

In fact, Kvalvaag says Scatec designed the Release system based on their experience and lessons learned building 2GW of utility scale projects in remote areas of Africa and the rest of the world. Release is a flexible agreement of pre-assembled and containerised solar PV and battery equipment, which is then securely integrated with the existing power infrastructure.

“To assemble and fit substructures, cables and modules normally requires setting up a factory-type assembly process in unfriendly environments. With Release the equipment is mostly pre-assembled, including substructures and modules. This not only shortens the installation time significantly (we can typically instal 2MW per week) but also requires a fraction of the labour, tools and machinery typically required,” says Kvalvaag.

Setting up a solar PV facility

When the company develops a solar facility at a remote mining site, Scatec starts the process by gathering as much information as possible about the mine. It is important to have detailed specifications on the existing power generation infrastructure and load profile. This is required to size the solar PV facility and storage and to estimate the potential generation and savings the system can yield.

Depending on the mine’s particular power stability requirements, power generation infrastructure and especially at higher solar PV penetration, additional grid and power integration studies are undertaken.

Once the sizing is finalised and the lease term agreed, Scatec ships the equipment to site. The company’s specialised team and local labour installs and commissions the work.

“Our approach is to define the scope of work together with the client to optimise costs (land preparation, for example, could be done by the client) and knowledge transfer. For example, we offer training of on-site personnel for the maintenance of the plant,” says Kvalvaag.

Typically, the equipment consists of the solar PV system and storage. This includes PV modules and trackers, cabling, inverters, AC combiner boxes and a substation made up of a step-up transformer and an energy management and control system to ensure a complete power solution with seamless integration into the existing infrastructure. The company monitors the system remotely 24/7 from their control monitoring centre in Cape Town, South Africa.

The benefits of investing in solar PV

The initial capital cost of investing in a solar PV solution might be high, but the long-term benefits for a remote mine are substantial. Reducing costs and CO2 emissions are the main drivers, however, other advantages include creating redundancy in the energy supply, and the ability to obtain better reliability of power. Less outages typically do not only impact the cost of power, but more importantly reduces the cost and increases the predictability of their core mining operations.

The big question mark has always been around the ability of solar panels to drive the mining operations on its own. To date, that goal has not been achieved, and the system needs to be combined with an exceptional storage facility and hybridised with other sources of energy. However, installing a good solar PV system could potentially reduce up to 30% to 40% of the mines’ energy load.

Scatec’s Release, for example, was especially designed as a flexible hybrid solution that can easily adapt to any significant changes in the load that the mine might experience because of expansions or closures. Release can quickly be installed, recommissioned, or expanded.

“Solar PV only produces power during the day, and currently the combination of PV and storage would typically off-set 25-40% of the mine load in the cases we are looking at now to be cost efficient. With lower battery storage costs going forward, we foresee that the renewable penetration will increase as we can install higher capacities to replace more of the thermal or alternative power currently being used.

Investing in hybrid systems

“Our assessment of the optimal hybrid solution, including power stability and lowest levelised cost of energy (LCOE), is customer-specific, and depends on the mine’s access to wind, bio-mass or other renewable energy sources. Scatec works with our clients through this process. We have recently been awarded projects with customers targeting 100% renewable energy. These types of assessments require inputs and advice from multi-technology experts like Scatec,” says Kvalvaag.

Depending on the location, infratructure and logistics, it is possible for Scatec’s Release system to generate power within four months after the contract has been signed. It makes this product ideal for junior mining companies developing shallow open pit mines in Africa that are required to start producing within tight deadlines.

“Detailed timelines depend on the logistics required to ship and transport the equipment to site as the installation rate is between 1MW and 2MW per week. We believe it is important for us to tap into our client’s experience and knowledge as well, in order to minimise the risk of delays, and ensure a smoothest delivery and installation,” says Kvalvaag.

Scatec Release is making massive inroads into the global mining industry as more and more mining companies turn to renewable energy to mitigate their potential adverse impacts. Renewable energy is a key enabler of remote mines.

Torex Gold cuts emissions     

Scatec recently entered into a lease agreement with mining company Torex Gold for a 8.5MW solar plant to provide renewable power to the Morelos Media Luna and El Limon Guajes projects in the Guerrero Gold belt 180km southwest of Mexico City in Mexico.

“The agreement was a landmark deal for “Release by Scatec”, says Kvalvaag.

The initial contract term is ten years with the possibility of extension and options for buy-out starting after the expiry of year three. The solar plant can at any time be expanded, including adding battery storage to further increase the use of renewable energy. It can also be moved to a new location if needed. The new solar plant is expected to be completed in the fourth quarter 2021 subject to permitting approvals.

“The agreement is an important milestone for us in delivering reliable and renewable power to the mining industry. We have had a good cooperation with Torex in designing the solution to adapt to challenging topography. The Release model is designed to provide flexibility both with regards to contract term and capacity, and thus has great potential in mining”, adds Kvalvaag.

The new plant is expected to reduce Torex’ Scope 2 greenhouse emissions by up to 8.6% using 2019 as the baseline year and is Torex’ first major foray into renewable energy at its operations.

“As is often the case with innovative and sustainable solutions, in addition to the environmental benefits the solar plant will provide, there will also be economic upside and benefits to the local communities. Factoring in the installed cost of the plant together with the ongoing lease fee, we expect to save approximately USD 1 million per year in energy costs over a 20-year lease period, with full payback of the solar plant realised within approximately 7 years”, says Jody Kuzenko, President and CEO of Torex Gold.

Developing a new mine in remote regions has always required tenacity and perseverance. That has not changed. However, in a world where the emphasis is now on the softer aspects of mining, and where flexibility and diversity count more than just mining skills, teaming up with the right partners will be key to successfully bring a new project into fruition within budget and within timelines. Energy is a focus area for mining executives, and to invest in a system that can be quickly assembled, installed, removed, or expanded, will become critical in the future.

Renewable energy is a key enabler for remote mines.

Follow the link to the Scatec Release demo site in Stellenbosch, South Africa https://vimeo.com/557619971

Leon Louw is the founder and editor of WhyAfrica. He specialises in natural resources and African affairs.        

WhyAfrica provides you with business intelligence that matters. Africa is our business, and we want it to be yours too. To subscribe to WhyAfrica’s free newsletter or digital magazine, and for more news on Africa, visit the website at www.whyafrica.co.za or send a direct message.

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