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IMARC ready to explore the race to decarbonise the energy sector

The global effort to decarbonise the energy sector is underway, and the race to net zero is shaping up to be an investment opportunity to define the decades to come, the organisers of the IMARC conference report.

Research suggests that as the price of adopting green energy continues to fall, so will the global demand for fossil-fuelled energy sources. Eventually a tipping point will be reached, and fossil fuel dependent energy companies’ assets will become ‘stranded’ unless they can adapt or pivot toward new sustainable energy practices.

As nations in the first world expand and those from the second and third world modernise, their energy needs will do the same, meaning more electricity, more hydrogen, more nuclear and more yet-to-be-discovered energy sources will be needed than ever before.

For the companies participating in Australia’s biggest mining conference, the International Mining and Resources Conference (IMARC) in 2022, staying in the race to decarbonise is essential.

Tipping point

Research suggests the tipping point for fossil-fuelled energy providers will come when costs for renewables reach parity with the lowest-cost traditional fossil alternatives, and this could be much sooner than 2050.

For such companies, demonstrating the long-term value to investors in a soon-to-be stranded asset class is becoming an increasingly hard sell. But it does not have to be. By pivoting toward renewable energy and investing in a low-carbon future, companies can ensure their survival after net zero.

EDL CEO, James Harman, said the industry was making the slow but sure transition to decarbonisation.

“The world has long relied on cheap, plentiful fossil fuels to power economies,” Harman said.

“In the early 2010s, EDL started looking to solar and wind generation as alternatives to fossil fuels across our portfolio, particularly for off-grid customers in remote Australia who were largely dependent on diesel- or gas-fuelled generation.

“In recent years, we have enjoyed great success with our hybrid energy solutions, helping our customers reduce their carbon footprint, but importantly maintaining and improving reliability whilst holding or reducing price. For example, our Agnew Hybrid Renewable Microgrid at Gold Fields’ Agnew Gold Mine provides the mine with energy that is an average of 50-60% from renewable sources, with 99.99% reliability.”

“EDL was one of the pioneers in the Australian landfill gas sector in the 1990s and, today, we are leading the way in high renewable energy fraction islanded microgrids. We are also exploring the introduction of landfill gas to renewable natural gas/biomethane technology to the Australian market, and the economic production of green hydrogen.”

ESG reinvigorating investment

Environmental, social and governance (ESG) frameworks are, at their core, risk assessment tools that consider the effect climate change will have on investors’ value creation opportunities. In June 2021, research and advisory experts, Gartner, released some jaw-dropping facts about the growing importance of ESG credentials.

According to Gartner, more than 90% of banks monitor ESG, along with 24 global credit ratings agencies, 71% of fixed income investors and more than 90% of insurers. Media mentions of ESG data, ratings or scores grew by 30% year-over-year in 2020, and 67% of banks screen their loan portfolios for ESG risks.

Harman acknowledged that it was important for attitudes and practices across the energy sector to change.

“Given that electricity generators are some of Australia’s biggest carbon emitters and most of the product generated is carbon intensive and derived from fossil fuels – the most important ESG themes for energy companies are climate change action and environmental stewardship,” he said.

“This includes investment in research and development into zero emissions technologies such as distributed energy solutions, energy storage and alternative renewable fuels as well as carbon capture & storage.”

ABB Australia Head of Mining, Nik Gresshoff, is encouraged by the innovation and progress he’s seeing in electrification and hydrogen technologies. ABB Australia is a Gold Sponsor of IMARC in 2022.

“The challenge for mining companies now is to map out their own journey, and to weigh up the gains that can be achieved now through automation, along with the investment required to get to net zero,” Gresshoff said.

Gresshoff recommends companies first define what their carbon footprint is, and what falls within their scope for decarbonisation, before beginning a net-zero journey. “Are they focusing on direct and indirect emissions initially or including the whole supply chain from the outset?” he asked.

“The next step is to examine the technology and what is currently possible to decarbonise. Having a clear understanding of where the company assets are in their lifecycle is critical, as well as an understanding of what technology is available and what technology could fit with the current operation.”

Can dinosaurs survive the Ice Age?

Fossil fuels may be going the way of the dinosaurs that created them, but economies of the future will still require the massive infrastructure frameworks and operational capacities to meet current and future energy needs.

In fact, economists have suggested an overnight collapse of the energy giants could result in massive job cuts and instability leading to a global economic recession.

As was made clear at the Glasgow COP 26 Summit, there is a ‘wall of money’ that will be available for the energy companies of the future – whether that is retrofitting existing gas pipelines for transport of liquid hydrogen or utilising closed coal mine sites for new nuclear power sites, or any number of ways that energy companies can and are pivoting.
EDL believes there is an opportunity for many technologies to play their part.

“There won’t be a one-size-fits-all energy solution that achieves affordability, reliability and sustainability for our diverse country,” Harman said.

“Large conventional power stations are and will continue to be replaced with lower emissions plant with support to make them more dispatchable, allowing cheaper renewable energy to be scheduled when available.

“For shorter-term storage, batteries are feasible but longer-term storage is currently uneconomic. There are a few potential options to resolve this including pumped hydro, new kinds of batteries and hydrogen.

“Based on our experience in the USA, we also see the potential for renewable natural gas (RNG), or biomethane, to play a significant part in the transition from fossil fuels to renewables in the industrial, heating, power and transport industries. RNG production is a technologically mature, ready-to-scale product that is deployable now.”

EDL’s James Harman will be sharing further insights on net zero at the upcoming IMARC in Melbourne, Australia, taking place on January 31-February 2, 2022.

IM is a media sponsor of IMARC

GenusPlus Group to construct 98 km overhead transmission line for Fortescue

GenusPlus Group Ltd says it has secured Construction of Civils and Lines contracts with a value of circa-A$30 million ($21.5 million) with Pilbara Energy Company Pty Ltd, a wholly owned subsidiary of Fortescue Metals Group Ltd.

The contracts relate to the construction of a 98 km, 220 kV single circuit overhead transmission line for the project.

GenusPlus’ Managing Director, David Riches, said: “It is a compliment to the team and recognition for GenusPlus that Fortescue has awarded our business with further contracts for the next stage of the Pilbara Transmission Project.

“We look forward to further growing our relationship with Fortescue on this significant project.”

The Pilbara Transmission Project consists of 275 km of high voltage transmission lines connecting Fortescue’s mine sites.

GenusPlus will increase its capability in transmission line construction with the acquisition of additional specialised drilling equipment that is used to create the footing of transmission towers providing the opportunity for GenusPlus to expand its internal drilling capability, it said. The cost of the equipment is approximately A$6 million and will be debt-funded through existing equipment finance facilities.

Riches said: “Internalising the drilling services that relate directly to the construction of powerlines will provide GenusPlus with added flexibility and control of the critical path of construction timelines.”

Fortescue’s Chichester Hub iron ore operations hit solar power milestone

Fortescue Metals Group’s Chichester Hub operations are now being powered by solar energy following the completion of the 60 MW Alinta Energy Chichester Solar Gas Hybrid Project in Western Australia’s Pilbara region, the miner confirmed.

Completion of the project with Alinta Energy marks a major milestone in the delivery of Fortescue’s decarbonisation strategy, as the company works towards its ambitious target of being carbon neutral by 2030 for Scope 1 and 2 emissions.

The solar farm will power up to 100% of daytime operations at Fortescue’s Christmas Creek and Cloudbreak iron ore sites, displacing around 100 million litres of diesel every year. The remaining power requirements will be met through battery storage and gas generation at Alinta Energy’s Newman Power Station, FMG said.

Fortescue Chief Executive Officer, Elizabeth Gaines said: “The completion of this project is a practical example of Fortescue delivering on its ambitious carbon neutrality target and demonstrates that renewables can power the energy needs of Australia’s mining and resources sector.

“As Fortescue transitions from a pure-play iron ore producer to a green energy and resources company, this milestone is a critical part of our Pilbara Energy Connect project which, together with the Chichester solar farm, will see 25% of Fortescue’s stationary energy powered by solar.”

Alinta Energy’s MD & CEO, Jeff Dimery, said: “Together, we’ve built a benchmark renewable project with an ambitious partner and, given the abundance of high quality renewables resources in the Pilbara, we look forward to supporting others to do the same.

“I’m very proud of the team and thank Fortescue, our partners, contractors and suppliers, NAIF, ARENA, and, in particular the Nyiyaparli People, on whose country the solar farm sits.”

The project also includes the construction of approximately 60 km of new transmission lines, linking Fortescue’s Christmas Creek and Cloudbreak mines to the solar farm and Alinta Energy’s existing energy generation infrastructure in Newman.

NextSource contracts CrossBoundary Energy for Molo hybrid power project

NextSource Materials has awarded a power supply contract to independent power producer CrossBoundary Energy (CBE) for the long-term supply of solar and thermal generation to power the operations of its Molo graphite project in Madagascar.

The contract is for a 20-year term and has been designed to scale with the production output of the Molo mine, where delivery of power will increase in lockstep with all future expansion capacity requirements, NextSource said.

A subsidiary of CBE in Madagascar is developing the project and will build, own and operate the Molo hybrid energy power plant at no capital cost to NextSource, it said. The plant will be located adjacent to the Molo mine site and is expected to be operational at the same time as the Molo mine is due to be commissioned in the June quarter of 2022.

“Through this contract, NextSource will initially be able to source up to one third of the Molo mine’s total electricity needs from renewable solar energy,” NextSource said. “NextSource and CBE are committed to optimising the solar component throughout the contract to increase the percentage of renewable energy to a majority.”

The hybrid energy power plant will comprise a 2.5 MW solar PV energy system, a 1 MWh battery energy storage system (BESS) and a 3.3 MW thermal energy system (diesel generators) that will supply all the electricity requirements for the Molo mine and processing plant. The thermal energy system will be used in combination with the solar plant and BESS to provide uninterrupted power supply and ensure 100% power availability to the mine, NextSource said.

The renewable energy services provided by CBE will be supplied exclusively to NextSource and provide guaranteed energy cost savings, according to the mine developer. This rate will lower expected energy costs on a per kWh basis versus the expected cost per kWh rate based on thermal power alone, as modelled in the company’s 2019 Molo feasibility study. This study outlined a phased development approach at Molo with Phase 1 producing 17,000 t/y over the first two years of production and Phase 2 producing a total of 45,000 t/y by year three. Earlier this year, the company announced the initiation of a technical study for an expanded Phase 2 production capacity of at least 150,000 t/y of SuperFlake® for Molo.

NextSource added: “The hybrid plant will contribute significantly towards NextSource’s adherence to its environmental, social and governance principles. It will also achieve the company’s broader initiative to reduce its environmental footprint through the deployment of renewable energy infrastructure to reduce emissions and work toward its goal of a carbon-neutral energy system.”

NextSource President and CEO, Craig Scherba, said: “Deployment of clean, renewable and sustainable power sources to reduce emissions is a cornerstone of our operational strategy and will reduce our expected energy costs over the life of our project.”

Matthew Fredericks, Head of Mining at CrossBoundary Energy, added: “We worked closely with the NextSource Materials team to design a custom solar hybrid solution for the Molo graphite facility. This power system will reduce the mine’s total cost of electricity, lowering its all-in sustaining costs, as well as minimising its carbon emissions. CBE is proud to be awarded this second project opportunity in Madagascar and honoured for NextSource Materials’ selection of our flexible, collaborative approach to sustainable energy solutions for African mines.”

Earlier this year, CBE announced two additional hybrid renewable energy projects, the first for Rio Tinto’s QMM ilmenite operation in Madagascar, and the second for Eramet’s mineral sands mine, Grande Cote Operations, in Senegal. In total, CBE is now delivering 40 MW of solar and wind generation and 20 MWh of battery energy storage capacity for African mines.

Northern Star shores up KCGM energy supply with Newmont Kalgoorlie power deal

Newmont has agreed to sell its Kalgoorlie power business to Australia’s Northern Star Resources Ltd in a deal that could see the leading gold miner pocket $95 million of cash.

The deal follows the January 2020 sale of Newmont’s 50% stake in Kalgoorlie Consolidated Gold Mines (KCGM). Of the $95 million in cash, $25 million relates to an option payment previously received from Northern Star as part of this stake. The cost of the option will be deducted from the final purchase price, leaving Northern Star to pay the balance of $70 million at completion, expected to occur in December 2021.

Newmont said the Kalgoorlie power business has been a profitable asset for Newmont since the sale of its stake in KCGM. It supplies electricity to KCGM via a suite of contracts, licences, approvals and third-party arrangements, including a 50% interest in the 110 MW duel fuel gas turbine Parkeston Power Station near Kalgoorlie, owned in joint venture with Canadian energy utility, TransAlta Corp.

Northern Star said the purchase provided the company with significant synergies and value, including infrastructure and power security to support the requirements of KCGM; lower power costs at KCGM; further options for Northern Star to implement renewable energy.

Northern Star Managing Director, Stuart Tonkin, said: “The purchase means our Kalgoorlie power supply will now form part of our studies into ways to meet our commitment to becoming carbon-neutral.”

Newmont President and CEO, Tom Palmer, added: “Australia is a critical contributor to Newmont’s global portfolio of world-class assets, located in top-tier jurisdictions. With the sale of this non-core asset, we will continue our regional focus on delivering long-term value at our Boddington and Tanami operations and advancing our future project pipeline through active exploration campaigns.”

Rolls-Royce and Sustainable Development Capital to offer ‘Energy-as-a-Service’

Rolls-Royce has agreed to a cooperation with the global investment firm Sustainable Development Capital LLP (SDCL) to jointly offer ‘Energy-as-a-Service’ solutions that can help accelerate the take-up of more sustainable power in applications such as mines.

The agreement, signed at the World Climate Conference (COP26) in Glasgow on November 11, allows Rolls-Royce to provide customers with electricity and/or heat, generated by a sustainable and efficient energy system, as a subscription service, removing the need for customers to secure up-front infrastructure finance or operate the system themselves.

“The provision of ‘Energy-as-a-Service’ where a customer pays for heat and power through a subscription model, represents a very attractive way to improve access to sustainable power,” Rolls-Royce said. “Rolls-Royce will work with SDCL and other partners to design, finance, build, commission and operate new projects.”

SDCL has more than a decade of experience of developing and financing clean and decentralised energy infrastructure projects in the UK, continental Europe, North America and Asia. Rolls-Royce, through its Power Systems business unit, has a portfolio of microgrid systems that bring together renewable energy sources such as solar and wind power with mtu-branded battery storage and gensets to ensure reliable power generation. It is currently developing fuel cell systems and making its existing mtu engines compatible with sustainable fuels, paving the way for net zero microgrid solutions within the next two years.

Examples of ‘Energy-as-a-Service’ projects can range from providing sustainable and reliable power for communities in remote areas that are not connected to a public power grid; to industrial parks that want to be supplied with green power as well as emergency back-up and mines that want to replace old, inefficient, equipment to meet new regulatory requirements and make use of as much renewable energy as possible.

Andreas Görtz, Vice President Power Generation at Rolls-Royce Power Systems, said: “Energy-as-a-Service is particularly interesting for companies that need to adapt their energy supply to new circumstances – be it an expansion for which more power is needed or an adaptation to new regulatory requirements, such as emissions guidelines. Because this often involves investing in equipment, such as a microgrid, that requires expertise to operate, it’s a challenge for customers to do this on their own. By offering Energy-as-a-Service, we can help them overcome that challenge.”

The portfolio of energy systems that can be made available through ‘Energy-as-a-Service’ to provide electricity and/or heat, ranges from smaller plants using combined heat and power units to battery containers and complex microgrid solutions, Rolls-Royce said. The existing mtu product range will be expanded in the coming years to include new technologies such as hydrogen-powered engines, fuel cell systems and combustion engines that can be operated with sustainable fuels such as e-diesel and hydrotreated vegetable oils.

Perry Kuiper, President Sustainable Power Solutions at Rolls-Royce Power Systems, explained: “Industrial companies and other businesses that rely on environmentally and climate-friendly energy can avoid ever-increasing energy and grid connection costs as a benefit from our new Energy-as-a-Service offering. We use our own new mtu technologies, our system expertise and our global network of partners and service locations to offer our customers an efficient and reliable energy supply on their way to climate neutrality. With SDCL, we have a strong financial partner on board that has successfully developed and financed clean energy, energy efficiency and decentralised energy infrastructure projects since 2007.”

Pilbara Minerals enlists Contract Power Australia for Pilgangoora solar power plans

Pilbara Minerals Limited has announced a Power Purchase Agreement (PPA) between its wholly owned subsidiary, Pilgangoora Operations Pty Ltd, and Contract Power Australia that could see a 6 MW solar array built at the Pilgangoora lithium project in Western Australia.

The solar array is, the company says, an important demonstration of its commitment to implementing environmentally friendly power solutions, as a part of its pledge to transition to net-zero emissions (scope 1 and 2) in the decade commencing 2040.

Pilbara Minerals said it looks forward to continuing its working relationship with Contract Power and the broader Pacific Energy Group, which began in 2018 when the first baseload power station was installed at Pilgangoora. The PPA involves a 15-year contract to construct, operate and maintain a 6 MW solar array, which is estimated to displace 3.8 million litres/y of diesel fuel, saving an estimated 9,900 t of CO2/y over the contract period.

“A key factor in awarding this exciting new renewable energy project to Contract Power was their established track record and ability to design and safely deliver turnkey energy projects,” the company added.

It is anticipated that procurement for the project will commence imminently with commissioning expected in late July 2022, and commercial operation from the end of August 2022. The design facilitates the future expansion of solar capacity and potential inclusion of battery storage at Pilgangoora, as Pilbara Minerals creates further efficiencies around its power supply and storage solutions at Pilgangoora, it said.

The installation of the first phase of the solar farm is just one part of the initial rationalisation of power assets at Pilgangoora, as the company further integrates the Ngungaju Operation. A local power network will be created to join the Ngungaju and Pilgan Plants, and the Carlindi camp facilities thereby creating further efficiencies, Pilbara Minerals explained.

Pilbara Minerals’ longer-term objectives include integration with other northern Pilbara power and/or gas and renewables sources with a view to creating further efficiency gains on the path to net-zero carbon.

Northern Star and Nomadic Energy boost solar power capacity at Carosue Dam

Northern Star Resources has recently worked with Nomadic Energy to commission an additional 3.3 MW of solar power at its Carosue Dam gold operations in Western Australia.

Nomadic worked with the Carosue team to install and commission the solar farm over a six-week period using pre-fabricated mobile arrays, pre-made DC harnesses and modular inverter stands.

The solar project has a DC capacity of 3.32 MW, which was made up of 8,100 410 W panels on 90 pre-fabricated mobile arrays. The maximum AC output of the farm is 2.75 MW AC, which, in combination with the original solar farm, brings the total site solar penetration to 3.5 MW AC.

Northern Star says the project is planned to offset an additional circa-3,548 t/y of CO2.

Small modular reactors could offer ‘game changing’ power solution in mining, report says

A Minerals Council of Australia-backed report looking into the potential use of small modular reactors (SMRs) in Australia argues they might provide realistic options for decarbonising large regional settlements and off-grid mining operations.

The report, titled ‘Small modular reactors in the Australian context’, is authored by Dr Ben Heard, a Senior Consultant in the Engineering and Asset Management team of Frazer-Nash Consultancy.

Dr Heard thinks SMRs have a role to play in replacing fossil fuel capacity in Australia’s existing grids, but also offer a decarbonised power alternative at off-grid mine sites.

SMRs are power generators of typically 300 MWe or less that use nuclear fission to provide clean, fully reliable heat and power, on-grid or off-grid. The construction time and capital costs associated with them are considerably less than large-scale nuclear reactors or equivalent energy production methods, according to the report. They are also among the safest forms of energy production, coming with passing cooling systems, fewer mechanical parts requiring maintenance and auto fail safe, Dr Heard said.

“Factory-built and easily transportable, SMRs can be scaled to meet energy demand,” Dr Heard said. “Increasing capacity is as simple as adding another module.”

Some SMRs will also use fuel more efficiently than current reactors, producing less waste, according to Dr Heard, who said “advanced fuels” will be easier to recycle for even greater energy production.

On SMRs potential in mining, Dr Heard said: “Being potentially water free and offering decades of uninterrupted power, some of the earliest and most logical deployments of nuclear power in Australia might actually be away from our major transmission networks. Where operations are more speculative, hybrid power systems of diesel fuel, solar and batteries are likely to remain solutions of choice.

“However, for establishing or repowering remote operations away from fossil fuel consumption and with exceptional reliability, the ability to bring megawatt decades of reliable power all the way to where it is needed is a potentially game-changing technology solution.”

An overseas example of this comes from KGHM, the Poland-based copper and silver miner, which recently signed a joint commitment with NuScale Power and PBE Molecule to develop and implement SMR technology to replace its existing coal-based energy sources.

Dr Heard concluded: “In summary, SMR technology has several potentially sensible uses in Australia’s energy transition that are worthy of close consideration – joining renewable technologies to provide an incremental transition from retiring coal and gas assets; as an option for large, established settlements, and for smaller and remote off-grid settlements and operations.

“On a technical basis, their placement is relatively unconstrained compared with alternative generating options and potentially advantageous in taking advantage of existing infrastructure and skilled workforces.

“Assuming a future legislative and regulatory environment that permits the use of this technology, actual siting will benefit from best practice, consent-based siting processes.”

Ora Banda benefits from Aggreko virtual LNG pipeline at Davyhurst gold mine

In what is a world-first for global energy provider Aggreko, the company has introduced its latest high efficiency gas engines at Ora Banda Mining’s Davyhurst gold mine in Western Australia.

The power station, which uses a virtual pipeline of gas trucked over 650 km, is expected to slash the mine’s carbon emissions by 25,000 t during the next five years, Aggreko says.

A virtual gas pipeline is a substitute for a physical pipeline whereby gas that would typically be conveyed through a conventional gas pipeline is instead transported as liquified natural gas (LNG) or compressed natural gas to the point of use by sea, road, rail or through a combination of one or more of these transport modes.

Aggreko Australia Pacific Managing Director, George Whyte, said the LNG station project at Davyhurst was another step in the company’s mission to help miners’ get closer to their net zero emission targets.

“The Davyhurst gas power station is a great example of how a mine which previously operated on diesel wanted to operate on cleaner fuel and we were able to switch from diesel to gas,” Whyte said.

“Creating a virtual pipeline application is a way to switch from diesel to a cleaner fuel source and reduce carbon immediately without requiring any capital outlay or a physical gas pipeline.

“The result at Davyhurst is a gas power station comprising five LNG-generating sets and two diesel generating sets for a combined modular power output of 8.2 MW. Aggreko’s gas-fired power station will enable Ora Banda Mining to reduce CO2 emissions by approximately 25,000 t during the initial five years of operation.”

He added: “This project demonstrates great innovation, uses a virtual gas pipeline and is a world-first for us using the high-speed reciprocating gas engines in our power generators. The power station is highly efficient, scalable and very suitable for transient loads and for the introduction of solar at a later stage.”

Whyte said Aggreko’s contract to supply the mine with power saved the junior miner on large capital expenditure and allowed miners to focus on their core skill of mining.

“Of appeal to miners is being able to take on flexible contracts with no capital outlay,” he said. “In addition, Aggreko upscales the technology, and the level of power is scalable so it can evolve with the mine.

“At Aggreko, we will reduce the amount of fossil diesel fuel used in customer solutions by at least 50% by 2030 and become a net-zero business across all services we provide by 2050. We are continuing to innovate and work with miners to reduce carbon by providing them with cleaner, scalable and modular energy as they work toward their net-zero targets.”

Ora Branda Mining Managing Director, David Quinlivan, said mining operations started on its large land holding in Western Australia in 2019 and reprocessing started again in January 2021.

“As part of the capital works program, we needed to re-establish a power station at Davyhurst and we worked with Aggreko and EVOL LNG to build a natural gas-powered station to power all of the site,” Quinlivan said.

“Initially, power was supplied to the site via an overhead line from Kalgoorlie. It is now trucked 650 km to site where it is used to power the gas generators. The power station developed for the site now supplies power to the processing plant, to the administration complex, our exploration and core processing facilities, the main mine accommodation plant, and out to the underground mining offices. It also powers our primary communications facilities.

“Working with Aggreko has resulted in a significant reduction of greenhouse gas emissions for our company.”