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Miners renewing their interest in alternative power solutions

Solar power may not completely replace more traditional means of generation in the short term, but mining companies are already starting to see a strong business case for adding renewable solutions to their energy mix.

*According to Rob Schueffner, Hybrid Energy Solutions Manager for Caterpillar Electric Power, the financial benefits and reliability of renewable energy solutions available for mines today are quickly matching the environmental benefits.

Mines can realise energy savings starting at 5% for easy and quick solutions that can extend up to 50% for installations that employ the full array of the latest fuel-saving power technologies available today, according to Schueffner.

“The ability to check many boxes is what makes hybrid energy solutions so attractive for many mines,” Schueffner said. “Mine operators who analysed hybrid solutions a few years ago are now surprised when they learn that the economics have improved so much because of cost reductions and system improvements. For one recent customer, their analysts discovered that the payback period is now roughly half what it was only three years ago.”

An integrated approach

One key to realising these returns is advanced technology and systems integration, and this is where Schueffner believes Caterpillar and the Cat dealer network stand out.

While many early micro-grid installations were disparate components cobbled together by multiple vendors, Caterpillar brings all the latest technology and market expertise in renewables under one roof to design, install, and commission a seamlessly integrated system that starts delivering returns immediately.

Caterpillar has decades of experience in providing solutions for thousands of surface and underground mines around the world, including power solutions that run on a variety of fuels.

Knowledge of the rugged environments where Cat products operate has enabled engineers to develop hybrid energy solutions used by the US military over the past decade, Schueffner says.

“We draw on a potent combination of mining knowledge, engineering expertise in harsh environments, and a broad mix of power solutions to help us develop the right hybrid energy solution for mines,” Schueffner said.

Scaling up

Every mine is different, and many variables must be considered when determining which renewable energy solution will work best for a particular mining operation. Geographic location, peak sun-hours, government subsidies, and energy production costs – including the purchase, transport, and storage of fuel – all must be factored in.

Given the long period of time mines are typically in operation, customers are also considering projected costs over the entire life of the mine, according to Schueffner.

“We have some mine operators who tell us they know the economic case for renewables may not quite be there yet, but they want to hedge against anticipated future fuel costs and start implementing large-scale projects phase by phase,” Schueffner said.

In sharp contrast to the substantial capital investment required for building or updating traditional powerhouses, hybrid energy solutions allow for a scalable approach. Schueffner said it is fairly easy to achieve fuel savings of 5% simply by adding energy storage to mitigate fluctuations in output power by regulating ramp-up controls, absorbing spikes in power demand, and injecting power for sudden power needs.

Cost benefits

“One customer has projected the cost benefits of using the Cat Energy Storage System as a virtual spinning reserve that enhances the efficiency of the entire powerhouse,” Schueffner said. “By taking advantage of the reserve to optimise energy usage for the varying loads across the site’s 24-hour cycle, the customer has projected a payback period of under two years.”

At the next level, solar photovoltaic panels can be installed to reduce fuel consumption by about 20% without making significant modifications to the powerhouse. This can serve as a simple and effective way to hedge against future increases in fuel costs, Schueffner says.

By adding the Cat Microgrid Master Controller, mining customers can increase solar PV production and more energy storage for grid stability to achieve fuel savings of more than 40%. Finally, the addition of Caterpillar’s latest, most efficient diesel, natural gas, and HFO generator sets can help mining operators cut their fuel costs by more than half. Even greater fuel savings may be achievable as renewables increase in efficiency and drop in cost.

“A mine can install some PV now, and then install a little more later along with energy storage and a master controller as prices continue to fall,” Schueffner said. “This phased-in approach can help mine operators enjoy immediate savings while progressively reducing fuel consumption as the economics improve.”

*This article was written by Melodie Michel from Energy and Mines.

The Energy and Mines World Congress takes place in Toronto on December 10-11, 2019.