Autonomous microgrids offer reliable, cost-effective power to remote

mining operations

By John McCloy, Energy and Mines

Q&A interview with Warner Priest, Business Development Manager - Emerging Technologies, Siemens

WP: Renewable integration and energy storage can offset between 20% and 70% of a hybrid power plants operational costs associated with fuel, being diesel and/or natural gas and fewer service intervals. The supply of diesel fuel to remote regional energy users is not only costly in its own right, but costly to transport. Integrating renewables reduces a mine's reliance on these fuels, with solar potentiallyoffsetting four to six hours of a day’s 24hr period of fossil-based fuel generation .

When solar is combined with wind, we see potential renewable penetration of up to 70%, with mines able to cut substantial fuel and transportation costs by serving their energy needs with this complimentary mix of renewables.

E&M: What are some of the common barriers for these projects and how are these being addressed?

WP: When it comes to mining, one of the major concerns is the lifespan of the mine. When any

Autonomous microgrids offer reliable, cost-effective power to remote mining operations

“ Microgrids are an exciting space at

the moment and a huge opportunity for

remote and edge of grid developments

in Australia.”

Warner Priest

Siemens

Autonomous microgrids offer reliable, cost-effective power to remote mining operations

By John McCloy, Energy and Mines

1

Q&A interview with Warner Priest, Business Development Manager - Emerging Technologies, Siemens

Business Development Manager - Emerging

Technologies

Moving to an autonomous microgrid that combines renewable energy and battery storage can o�er remote mining operations the opportunity to o�set between 20% and 70% of their energy costs. In this Q&A, Warner Priest, Business Development Manager - Emerging Technologies at Siemens shares hisinsight on the latest developments in renewableenergy and microgrid technologies for the Australian mining industry.

E&M: What are the main drivers for Australian mines and other large industrial users to integrate renewables and storage technologies?

WP: Australia is a big country, and one of the main issues is what we call the "tyranny of distance", which has a signi�cant impact on the costs of energy supply to remote regions in Australia, where many of the mining operations occur.

With the cost of renewables coming down, there is now an opportunity for mining operations, who have no connection to the electricity or gas grids, to run their operations o� a combination of renewable energy, storage technologies, and traditional fossil fuel based generation systems. We also see an increased interest in the roles that hydrogen could play as a fuel for power generation and fuel for transport, be it trucks or trains, as part of any mining operations.

E&M: What types of energy savings can remote mining projects expect from integrating renewables and storage?

investor considers a power purchase agreement (PPA) for a mining operation, there needs to be an attractive return on investment for that hybrid power plant.

Many mining operations state a mine life of only 3 to 5 years, with an expected return on investment within a very short period of time. The business case associated with the CAPEX pay down within a �ve year period is therefore a signi�cant barrier to getting hybrid power plants integrated with renewables o� the ground.

The mine life issue seems to be prevalent within the gold mining sector. When it comes to other mining operations like magnetite, phosphate or rare earth metals, we are seeing mine lives of 20 to 75 years. When the mine life is that long, the business case for renewables absolutely makes sense.

Obviously, a techno-economic assessment needs to be done to ensure that the independent power producer (IPP) for the mine will achieve a return on investment during the life of the mine. Generally, we �nd that that the business case stacks up well for mines with an expected life of ten years or more, depending on what renewable technologies can be deployed.

“Renewable integration

and energy storage can

offset between 20% and

70% of a hybrid power

plants operational costs

associated with fuel,

being diesel and/or

natural gas and fewer

service intervals.”

“Energy costs are a big

part of any mining

operations total mining

cost, and it's crucial to

consider what options

are available to

executives that would

de-risk this going

forward.”

Autonomous microgrids offer reliable, cost-effective power to remote mining operations

2

E&M: What are the latest updates in terms of technological innovations for remote microgrids?

WP: There is an opportunity for microgrids to play an important role in a mix of industries that require a combination of both electrical and thermal energy, both for heating and/or cooling.

Being able to embed your generation as close to the load as possible, coupled with a microgrid management system that manages the microgrid autonomously, has far reaching benefits for energy consumers, representing cheaper, more reliable power sourced from a renewable resource like solar and or wind.

This is particularly attractive when you can avoid the costs of the grid that can constitute up to 43% of a consumer's total cost of energy. This is an area where you can really start to generate savings for the consumer, particularly in energy-intensive industries like mining.

In terms of technical innovations, it is the techno-eco-nomic modelling (i.e. developing a digital twin) microgrid management systems that autonomously manage the complex mix of traditional energy generation with the variable nature of renewables. Some of the enabling technologies are energy storage and �sheye s ky c ameras f or m onitoring c loud movement and formation, and arti�cial intelligence to accurately forecast impacts on solar irradiation - what we refer to as grid smoothing as a service.

Hydrogen is particularly topical right now and something to consider as an alternative to the cost of diesel for power generation and/or transport, Siemens is already installing PEM Electrolyzers (Silyzer 200) into microgrids in Australia.

Through the innovation of intelligent electronic devices (IED) and sensors and their real time

communication capabilities supporting standardized protocols such as IEC 61850 and Pro�net, t hese microgrids can now manage the generation and distribution of the energy in a very e�cient, sm art and reliable way.

Through the power of digitalization and software these microgrids/smart grids are able to self-heal autonomously, meaning that energy supply is uninterrupted and operational costs for the life of the microgrid reduced considerably.

When microgrids not only provide power as a service, but also include water, waste and data as a bundled utility service, the business case is more appealing. It becomes easier to vertically integrate those services within the microgrid to work optimally together. For example, pump water when energy is cheap, turn waste into energy, use the same communication infrastructure for data services to the household or business as well as the management of the microgrid management system or smart grid.

E&M: What is the value in assessing microgrid options for a mine still in development - how does this underline the business case?

WP: In many cases these new mining developments are remote so the �rst step is to understand what it would cost to bring the electrical or gas grid to the site. Then compare this cost and its ongoing operational cost with that of the capital outlay for a microgrid hybrid power plant consisting of a traditional generation plant mixed with variable renewables, energy storage and its associated operational costs.

It is clear that, in the future, we will need to do more to decarbonize heavy industry. Policy and regulatory measures are expected to entice the adoption of renewable resources into the energy mix, and at some

point we would expect to see a price on carbon.

It is in any mining operations best interest, be it an existing operation or one that is being newly developed to prepare for this, to have measures in place to avoid substantial impacts that could come from a price / penalty on carbon. Fortunately there is a way to mitigate this risk with the integration of renewables and self-generating today or at least future proofing your plant so that renewables can be embedded as and when it is appropriate to do so.