Australian mining companies typically have their operations in remote sites, where the power network may not be reliable enough to guarantee a continuous supply of electricity. This drives mining firms to use diesel generators, which results in a very high kilowatt-hour cost; for some companies, having electricity costs more than 40 cents per kWh.
To compensate for their high electricity expenses, mining companies in Australia have been deploying solar and wind power. These systems are often combined with energy storage, allowing mining companies to set up their own microgrids.
This article describes the main reasons why solar power is among the best investments available for mining firms with operations in Australia.
As mentioned above, mining companies must often rely on expensive diesel generators due to poor coverage from power networks. After deploying photovoltaic arrays or wind turbines, each kWh generated represents electricity that must no longer be supplied by the diesel plant.
Mining companies have an energy demand high enough to justify investments in megawatt-scale solar power systems. These can now be installed for around $1 per watt in many cases, leading to a very quick payback period.
Mining companies rely on diesel deliveries to their extraction sites, and the consequences of a diesel shortage or a missed delivery can be drastic. Also consider that diesel has volatile prices, and companies using it as their main power source cannot budget energy expenses accurately.
Renewable generation reduces dependence on fuel deliveries to mining sites, since the energy inputs are free and delivered by nature: sunlight and wind. The diesel generator now consumes its fuel at a much slower pace, since it must only supply the power that cannot be generated from solar panels and wind turbines.
Mining companies can become even less dependent on diesel generators by adding energy storage to their installation. Batteries are still expensive, but the savings from renewable generation in mines are high enough to cover the ownership cost, while still achieving net savings.
The mining industry is often criticised for the environmental impact of extracting minerals, and dependence on a polluting fuel like diesel does not help their image! Solar power and other types of renewable generation not only provide savings and reliability; they can also help mining companies become more eco-friendly.
When mining companies develop their own microgrids, they help stabilise the power network in the surrounding area. This can be very valuable in remote areas far from major power plants and transmission lines, improving the electricity supply for smaller users in the region.