[hr]The day when Australia’s remote mine sites will be run on solar and other forms of renewable energy is not far away, writes Ivor Frischknecht.[hr]
This is particularly important in remote Australia where mining operations located off the grid account for five per cent of Australia’s total electricity consumption1. Electricity demand is predicted to grow in these regions, with Western Australia’s resources sector demand to 2018 projected2 to increase by the equivalent of 2.7 gigawatts of electricity generation capacity.
The downsides of diesel-generated power are well known. Diesel generators are expensive to maintain, volatile fuel prices make operating costs difficult to predict, and the unavoidable need to transport fuels long distances is costly, dangerous and subject to the vagaries of weather.
In contrast, renewables are already cheaper than diesel in some off-grid locations and, when accompanied with backup or storage technologies, can bring remote operations and communities closer to energy autonomy.
In some parts of the world the mining industry already recognises that offsetting on-site fossil fuel generation with renewable energy can reduce operating costs and improve energy security, thereby enhancing productivity and overall mine life.
A strong example is Rio Tinto’s Diavik Diamond Mine in northern Canada, which only has road access for around eight weeks a year. In 2013, their integrated wind farm reduced the mine’s annual diesel fuel requirement by 3.8 million litres and provided 8.5 per cent of the operation’s electricity needs. This renewable energy installation has already proven to be both commercially and technically successful.
“The collaboration…will establish the first large-scale off-grid solar farm for the mining sector in remote Australia.”
In Australia, the Australian Renewable Energy Agency (ARENA) is working directly with the mining industry to help identify similar opportunities and thereby improve the likelihood of renewables being considered as a viable alternative for onsite energy supply.
ARENA supports projects across a broad range of renewable energy technologies, with those involving solar energy currently having the most to offer the mining industry.
As it happens, energy-hungry remote mines are largely located where the most plentiful sources of solar energy are available. This intersection of growing demand and nearly unlimited solar energy potential is a compelling reason to explore ways to increase the use of solar in off-grid Australia.
Advances have already been made. The cost of stand-alone solar energy systems has dropped by 75 per cent in the past five years, making the displacement of fossil fuels with renewable energy a fully or near-commercial prospect in off-grid Australia. Solar also has the potential to be cost-competitive with coal or gas-fired power by the end of this decade, even without a carbon price.
Yet solar energy still has its challenges.
Australian researchers hold the world record for solar cell efficiency, but commercially available cells are significantly lower in efficiency. Solar solutions that meet baseload demand are far too expensive, and we also need affordable solutions for grid integration challenges. Perhaps most importantly, affordable storage technologies must be brought to market as soon as possible.
Through its targeted investment portfolio, ARENA is helping solar technologies to overcome these obstacles. Around 60 per cent of our $1 billion of committed funds support 140 solar energy projects, research fellowships and PhDs. This portfolio of prospective solar energy technologies includes solutions that are large and small, static and transportable, thermal and PV, and have grid as well as non-grid applications.
ARENA’s investments at the R&D stage demonstrate the technological breadth – and creative depth – of the research being undertaken to find increasingly efficient ways of harvesting the sun’s energy.
One of the R&D projects we are supporting is developing a new way to increase light absorption in solar cells using a technology called plasmonics, which involves metal particles embedded in silicon solar cells.
“…renewables are already cheaper than diesel in some off-grid locations…”
Another project is creating a solar thermal energy converter from materials used to propel spacecraft, allowing it to operate at 1400 degrees Celsius.
We are also supporting the development of tools that can detect micro-cracks in silicon wafers and cells during the manufacturing process, thereby reducing the variable yields and product quality that cost the PV manufacturing industry around $2 billion each year.
On a much larger scale, ARENA-backed projects are sharing knowledge gained through the construction and operation of utility-scale, grid-connected solar power to help reduce the costs of solar energy solutions.
The hybridisation of renewables with existing fossil-generation is also being explored with help from ARENA. Hybridisation provides the opportunity to establish large-scale renewables at less cost and with shorter timeframes by leveraging existing infrastructure.
Very many of these initiatives have relevance to mining operations and, with assistance from ARENA, are being accelerated towards commercialisation to realise their potential.
Solar’s challenge is not just a technological one, however. Mature and affordable solar energy systems can be applied at the business level today, yet the business community still treats the technology with scepticism. Without uptake by business and industry, renewables will forever remain a niche energy provider.
The main impediment to the mining industry benefiting from these technologies is its limited experience in identifying, assessing, and developing renewable energy solutions for remote operations.
ARENA’s Regional Australia’s Renewables (RAR) initiative has purposely been designed to address this challenge. RAR is focused on meeting the growth in off-grid electricity demand with renewables by raising awareness of renewable energy, increasing confidence in the technologies, and building key skills and experience within the industries that operate in remote Australia.
ARENA’s support helps overcome the risks – real or perceived – of working with a new technological solution.
ARENA called for expressions of interest for RAR projects at the end of last year and no less than 30 of the 72 submissions received came from mining companies or were for mining related purposes. These have the potential to springboard $1 billion of investment in new projects.
Weipa Solar Farm in far north Queensland is the first project to be funded by ARENA through the industry component of RAR. The collaboration between First Solar, Ingenero and Rio Tinto Alcan will establish the first large-scale off-grid solar farm for the mining sector in remote Australia.
ARENA will provide $3.5 million towards the first stage of this $23.4 million ground-breaking, two- phase project, which will supply up to 6.7MWp of solar power to RTA’s remote bauxite operation in Weipa including the township and port.
Completion of the first stage is expected in January 2015. At this time the solar farm will be made up of 18,000 PV solar panels using First Solar’s thin-film technology mounted on steel and aluminium structures. The system will generate an average of 2620 megawatt hours of electricity each year, and in the middle of the day electricity generated by the solar farm will offset up to 20 per cent of existing diesel-generated power. This will save up to 600,000 litres of diesel each year that would have otherwise been required to fuel RTA’s 26MW power station.
At the completion of stage two, which will also involve battery storage, up to 100 per cent of diesel-generated electricity will be replaced with solar power.
Once completed, the solar farm will complement existing diesel generation at Weipa with a reliable source of electricity by reducing RTA’s exposure to future fluctuations in diesel fuel prices and also support the company’s commitment to the environment. It will also help increase awareness and knowledge within the mining sector of the processes required for the planning, building and operating of utility scale off-grid energy applications on remote mine sites.
Another ARENA-funded project, being run by global construction company Laing O’Rourke, is developing a solar farm that can be packed up and moved to better meet the changing needs of energy users in remote locations.
The redeployable hybrid power plants combine solar modules with traditional diesel generators so that users can benefit from the advantages of solar without having to commit to a permanent installation. The off-site construction and ability to rapidly pack-up and pack-down the solar farm have the potential to lower costs and reduce risks associated with undertaking projects in regional and remote Australia.
ARENA also supports projects that aim to deliver proven and affordable storage technologies so that solar energy does not remain exposed to simplistic criticisms about its availability. We’ve invested in a CSIRO project that is developing a solar thermal energy storage system that can operate at up to 750 degrees Celsius, which will increase its efficiency and lower its cost. The project involves identifying the most suitable materials, designing and creating the system, and then integrating it with the solar thermal facility at CSIRO’s National Solar Energy Centre.
This is just a small sample of ARENA’s existing portfolio of more than 180 investments, worth close to $1 billion, which already have funding agreements in place with us.
The Australian Government announced in the 2014 federal budget its intention to return ARENA’s functions to the Department of Industry and unallocated funds totalling $1.3 billion to consolidated revenue.
The legislation to close ARENA by repealing the Australian Renewable Energy Agency Act 2011 was introduced into the House of Representatives in mid-June. The Senate simultaneously referred the matter to a committee for review and report by 4 September 2014. Any changes to the ARENA Act, including its repeal, need to be passed by both the House of Representatives and the Senate.
Until such time as the Act is amended ARENA will continue to accept and assess applications and manage the portfolio of projects already contracted.
For however long ARENA exists, it remains unique in being able to match Australia’s future energy needs with emerging renewable energy technologies, and support those with the best prospects to the brink of commercialisation.
Having identified corporate lack of understanding as one of the most significant barriers to the uptake of renewables in mining operations, ARENA is supporting projects that will increase the mining industry’s experience in assessing, planning and building renewable energy systems. By working with the mining industry to develop renewable solutions for off-grid and fringe-of-grid locations, ARENA will help displace fossil fuel-based electricity with renewables and increase the sector’s energy self-sufficiency while keeping a tight rein on their power costs.
This will ensure Australia’s major exporter, the mining sector, continues to be internationally competitive and a key contributor to the strength of our nation’s economy.
“The cost of stand-alone solar energy systems has dropped by 75 per cent in the past five years.”
Chief Executive Officer
ARENA (Australian Renewable Energy Agency)
Ivor Frischknecht is ARENA’s inaugural CEO. Before joining ARENA he was Investment Director at Starfish Ventures, a venture capital firm that manages $400 million primarily on behalf of Australian superannuation funds. Ivor’s responsibilities included the firm’s clean technology investment activities.
Ivor was previously Director of New Ventures at Idealab, a company involved in developing and investing in renewable energy technology start-up companies. His other previous roles include CEO of H2onsite (a company involved in commercialisation of clean energy generation technology) and a senior executive and advisor to a range of venture capital and energy companies. He started his career as a consultant with Bain & Co.
Ivor holds a Bachelor of Laws and Bachelor of Economics with Honours from the University of Sydney and a Master of Business Administration and Public Management Certificate from Stanford University’s Graduate School of Business.
1. Australia’s remote clean energy market, AECOM, June 2013
2. WA State Growth Outlook 2013, Chamber of Minerals and Energy WA