There’s not much to Tsumkwe. A small village in northern Namibia, it sits in the middle of nowhere, 50 km from the Botswana border on the edge of the Naye-Naye concession area. But, humble as it is, little Tsumkwe provides a model for the cities of the future.
Since 2011, the entire village has been powered by a 200 kW hybrid solar photovoltaic (PV) system. That system, installed by renewable energy firm Juwi Solar GmbH, consists of 918 polycrystalline solar PV modules, 1 MW battery storage and three integrated diesel generators. It powers the village’s hospital ward, water supply, street lighting, police station, radio station, mobile network and 100 households. And it’s entirely off the grid.
The solar PV modules benefit, of course, from the blazing Namibian sun. It’s a similar story in the vast, hot nothingness of the south Australian Outback, where the opal mining township of Coober Pedy (population 3 500) recently started an AUS$37 million renewable energy project that, on completion, will consist of 4 MW of wind energy, 1 MW of solar PV and 1 MW/500 kWh of lithium titanate battery storage. This new array is expected to displace 70% of the town’s diesel use, and for half the time it will require no diesel at all while Coober Pedy is powered entirely by renewable energy.
‘Our view is if it can be done at Coober Pedy, it can be done for Adelaide,’ energy consultant David Leitch told the Guardian. ‘If it can be done for Adelaide, it can be done for Sydney,’ he added, noting that if it could be done for Australia’s state capitals, then it could be done for the whole country.
South Africa, Australia and Chile are most likely to emerge as global leaders in the mining industry’s shift to renewable energy
The global mining industry is already buying into this vision of the future. In South America’s dry Atacama Desert, solar power is offering a sustainable, renewable alternative to the high costs of powering Chile’s copper mines. ‘Indeed, energy costs can reach up to 40% for remotely located Chilean mines, where access to power grids is often unfeasible and relying on diesel is particularly expensive,’ market research firm BMI wrote in a recent report.
‘Copper miner Codelco began investing in solar power several years ago, as did Anglo American and Glencore at the jointly owned Collahuasi copper mine.’
From Tsumkwe to Coober Pedy to Collahuasi, small towns and remote mines are teasing out the question: could we reach a point where an entire mine is run on low-cost, sustainable, renewable energy – independent of fossil fuels and entirely off the grid?
That question has just been answered. This past June, in a remote corner of Western Australia, mid-tier mining firm Sandfire Resources switched its DeGrussa copper-gold mine to a new 10.6 MW hybrid solar facility. The existing 19 MW diesel generator facility now works alongside a 34 080-panel PV solar installation.
The off-grid solar plant will provide most of the energy for the mining operations, with the battery storage add-on ensuring around-the-clock power for the mine. The solar array covers a total area of more than 20 ha, making it the largest integrated off-grid solar and battery storage facility in Australia and – by all accounts – the world. The installation was completed by Juwi, working with Pacific Energy subsidiary KPS, and funding by the Australian Renewable Energy Agency (ARENA) and the federal government.
‘Remote industries in Australia currently rely on 1.2 GW of power from diesel fuel that is prone to price volatility and supply interruptions,’ ARENA chief Ivor Frischknecht said at the project launch. ‘Renewables are already competitive with fossil fuels in many off-grid applications offering a strong, secure and reliable alternative to trucked-in diesel.’
DeGrussa – like Tsumkwe village and so many Australian, South African and Chilean mines – is certainly remote. The mine is located 900 km north of the nearest big city, Perth, and 150 km from the closest hamlet, Meekatharra (population 800). The remote location drove the need for renewable energy, while adding complexity to the project.
‘There were three dimensions to it: technical, commercial and legal,’ says Greg Austin MD of Juwi Renewable Energies. ‘Technically, it was a wonderful outcome, and the relationship with KPS was fundamental to this whole thing coming together. We now have a general MoU with them to target similar projects in the Australia/Pacific and Middle East/Africa regions.
‘Commercially it was also a challenge, because the life of the mine determines the PPA [power purchase agreement], and the PPA here had to be limited to an extremely short six-year period.
‘From a contractual point of view it was a very complex project to put together,’ he says. ‘The guys in Australia did an awesome job of getting everyone over the line. As we go into projects like this in South Africa – and in Africa generally – pioneering work is going to need to be done on the contractual side.’
Austin, of course, is already considering how the DeGrussa project might be replicated in South Africa – and well he might, especially in light of that new BMI Research report.
BMI claims that South Africa, Australia and Chile are the countries most likely to emerge as global leaders in the mining industry’s shift to renewable energy, as remote locations and unreliable power grids prompt miners in these countries to embrace renewable energy faster than their contemporaries in countries such as China, India and the US.
‘Power supply uncertainty remains a key challenge for miners in South Africa, making independently sourced renewable power plants a particularly attractive option,’ the report states. ‘For instance, Sibanye Gold said in its latest annual report that electricity costs increased by 13%, largely due to the annual Eskom electricity increase of 12.7%.
Between 2007 and 2015, Sibanye’s electricity costs rose from about 9% of total costs to 18%, despite the reduction in the firm’s electricity consumption by 20% during the same period.
As a result, the firm continues to develop a solar PV project at the Driefontein and Kloof operations, to complement baseload power, expecting commercial operation by 2017.
Elsewhere in South Africa, Germany’s Cronimet Mining-Power Solutions set up a 1.6 MW solar mini-grid to meet 60% of its energy needs in the Limpopo province, saving 450 000 litres of diesel in the process.
‘Power supply uncertainty remains a key challenge for miners in South Africa, making renewable power plants a particularly attractive option’
Gold Fields’ South Deep mine – one of the largest gold mines in the world – also recently installed a 40 MW solar project with assistance from the Rocky Mountain Institute-Carbon War Room NPO, whose Sunshine for Mines initiative aims to promote 15% alternative energy use across the mining industry by 2025.
Mega-mines, such as South Deep and Driefontein, are very different beasts compared to the far smaller DeGrussa. The question, then, is whether DeGrussa’s renewable energy model can be scaled to work at any mine, anywhere.
‘Look, I think every opportunity and every location is going to have its own challenges,’ says Austin. ‘There’s quite a technical discussion to be had around the level of penetration of diesel or HFO [heavy fuel oil]; whether you have battery storage on-site as well; whether you have any grid availability; and to what extent. Those four moving parts will determine what the ultimate hybrid solution would look like.
‘Having said that, there’s no limit on what can be done. For example, if you look at a large gold mine, they might have 400 MW of demand. There is no reason why one couldn’t consider a 100 MW PV. It just then becomes a bigger technical challenge to make sure that your integration is fully robust.’
So just how close are we to a situation whereby mines powered by renewable energy sources are the rule, rather than the exception?
‘The timeline is reducing,’ says Austin. ‘With diesel/PV battery integration, you land up with a fully off-grid capability. That’s exactly what the DeGrussa project is. So if you take the example of a mining house that’s prospecting in the DRC, and it says “Alright, we’ve got the mineral rights; now we need 100 MW”, and it doesn’t look further than a diesel or HFO combination with PV and with battery… That reality is just around the corner.’
After all, as Austin points out, there are ‘whole villages in Namibia that are off the grid. Now the more commercially interesting projects are with the larger off-takers – and that really speaks to mines in decentralised areas. So for us it’s just a natural progression. And it’s becoming more and more possible every day’.