Solar for Mines Means Price Stability and Reliable Supply

solar

Solar power will soon be the new standard for powering mining operations, says CEO of Lightsource Renewable Energy, Nick Boyle, adding that solar can lower the energy costs as well as provide stable power for mines.

“It will become more the norm to have solar sitting alongside diesel and batteries as a composite solution in terms of kWh for mine users,” Boyle said.

UK-based Lightsource Renewable Energy is a European solar energy developer. Energy and Mines recently spoke with Boyle about why mining companies should be interested in deploying solar energy for their operations.

Technological and economic improvements have led to solar being able to provide mines with a reliable supply of energy in remote locations for a fixed cost, which can easily compete with non-renewable energy sources.

“What we are able to deliver is supply and price security,” Boyle said. “In our solar scenario, price security comes from knowing all the up-front CapEx costs and small ongoing OPEX so you know where you are in terms of costs. You can’t fix that with diesel.”

What makes the solar option reliable is that the sun is bound to rise, Boyle added.

“The big plus of renewables is the predictability — I will bet you a million dollars that the sun will come up,” he said. “My business is based on the assumption that people like paying less rather than more and with us we will reduce your electricity price and give you security of supply.”

What makes solar an even more attractive option today is that mining companies no longer need to assume the financial risks.

“We will install, lift and shift solar, which mirrors how you buy your diesel today,” Boyle said. “We will contract for five to 10 years, and at the end, you can either renew or we will bring it somewhere else. We are the ones taking the risk that we are able to redeploy that somewhere else for the term of 30 years.”

Lightsource’s CEO will be giving a keynote address on ‘Adapting Renewables to Fit with Mining’s Business Model’ at the Energy and Mines World Congress in Toronto Nov. 21-22.

Here is the complete Q&A with Boyle.

Energy and Mines: What is your particular business approach to solar for mines and how do you see this market evolving?

Nick Boyle: We will own and operate the project on their behalf. We will build, operate and maintain the solar facility and the mine just contracts the electricity. The market will develop naturally. It will become more the norm to have solar sitting alongside diesel and batteries as a composite solution in terms of kWh for the mine users. Solar will become an ever increasingly large part of the electricity mix especially with storage.

E&M: How do you see mine partner PPAs differing from traditional utility-backed PPAs? 

NB: In terms of the PPAs themselves, the structure is the same — it’s a take-or-pay contract. The issue is the tenure and the flexibility that a mine demands over and above a solid state manufacturing client. There are so many unknowns for mines as soon as you go too far into the future because their output is driven by commodity prices.

E&M: You have also developed projects for other large industrial users including Thames Water and Bentley. Why do you think the mining sector is so compelling in terms of business development opportunities?

NB: Solar is competing with grid accessible electricity that is well-priced and abundant in most countries but mines are different because they tend to be very remote and, therefore, the grid is questionable. What we are able to deliver is supply and price security and that has never been done before. In our solar scenario, price security comes from knowing all the up-front CapEx and small ongoing OPEX, so you really know where you are in terms of costs. You can’t fix that with diesel.

E&M: By far the biggest hurdle for project uptake has been financing — matching life-of-mine requirements with project paybacks for renewables. How are you addressing this particular challenge?

NB: We have looked at all areas we have operated in and have come up with a solution that is bespoke for the end user. This is something we have been working on and are looking forward to talking about at the Congress in November.

We looked at the requirements of the mining market and positives of solar and aligned those businesses without asking the mines to take on the risks they don’t want. From a financing perspective, it is about us putting our money where our mouth is and taking a longer term view.

The message is we will install, lift and shift solar, which mirrors how you buy your diesel today. We will contract for five to 10 years and, at the end, you can either renew or we will bring it somewhere else. We are the ones taking the risk that we are able to redeploy elsewhere for the term of 30 years.

E&M: What would you say to a mining CEO who was resistant to renewable energy options in terms of the benefits these solutions can offer the mining sector?

NB: My business is based on the assumption that people like paying less rather than more and with us we will reduce your electricity price and give you security of supply. We will be able to fix that price for the term — the big plus of renewables is the predictableness — I will bet you a million dollars that the sun will come up. From our perspective, we are not talking about green, we are talking about price.

E&M: What are you looking forward to at the Energy and Mines World Congress on Nov 21-22? 

I am looking forward to meeting some very interesting and exciting contacts and making announcements about our progress, including our first pilot site and sharing some accessible solutions that will be available to the mining sector.

Lead image credit: Jeremy Buckingham | Flickr

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Anna Golubova is a correspondent for Energy and Mines.

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