Engineering & Mining Journal

DEC 2015

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Can Renewable Energy Sources Power Mines in Africa? The power and engineering sector is shifting focus away from diesel and toward lower-carbon options. It is a sig- nificant industry sign post when a global engineering and equipment brand like Caterpillar starts to offer renewables to the mining sector. Akram Elhenawy, glob- al mining key accounts manager for the electric power division of Caterpillar, believes the mining industry is increas- ingly ready for renewable solutions. In this interview, he outlines the new Caterpillar strategy with particular refer- ence to African mines. Q: How would you describe the market for hybrid solutions for remote mines in Africa in terms of current opportunities and barriers? AE: Accessing affordable water and ener- gy has increasingly become a challenge. Government reports estimate that mil- lions of people in Africa are living without any power at all. This is forcing mining companies to look at new energy solu- tions, especially since Africa has numer- ous energy resource options from oil and natural gas to solar and wind power. Today, remote mines in Africa are using diesel generator sets as the core of the sys- tem, providing firm, uninterruptable power to run the businesses. However, the price for diesel fluctuates, and there are diffi- culties with logistics and security as well as operational and maintenance costs. These issues are making renewables look like a very good financial choice for many big mining companies. In addition, there's a dramatic decline in the cost of renew- able energy, especially solar and wind. We've seen significant investment in wind and solar in countries like Chile, where mining companies have been investing in renewables to reduce energy and fuel transportation costs while improving transmission capacity, making these mines generally more competitive. We believe a similar approach will be adopted in Africa, and this will open more opportunities in the next five years for hybrid power solutions that integrate diesel and PV solar. Wind, biomass and small hydro will also present good opportunities. The biggest challenge we see right now is that mining companies are very conservative when it comes to using new technologies or alternate forms of energy. Political instability and health concerns are hurting Africa, on top of other barri- ers facing the development of renewable energy in the market today. Q: It seems that mining experts are less concerned about the reliability of sys- tems and more focused on the econom- ics. Is that your impression, as well? AE: Yes. In recent years, renewable ener- gy technology has matured and concerns about reliability have diminished. We're seeing increased investments, reflecting a better understanding of the benefits of integrated microgrid solutions. Typically, PV and wind reduce fuel consumption in the range of 30%–70%, but it's limited due to the high cost of energy storage. In the next few years, we expect storage technology to advance, with the price coming down. When min- ing companies trust that they can rely on renewable solutions, we'll start seeing a big shift…. In addition, communities want "green power" around them. Q: What do you think needs to happen to truly unlock the potential for partnerships between mining operators and renewable energy providers? AE: Several things. The most important is assuring mining companies that you are there long term for operation, maintenance and support. You have to guarantee the performance and availability of the system throughout the lifetime of the mine. Providers should help change the mindset within the mining industry by introducing this technology and educat- ing mining operators about the econom- ic, environmental, and social benefits. They have to work with mining compa- nies to understand the real-life costs of integrated microgrid projects and explore all available options to meet the cus- tomer's short- and long-term goals. Finally, providers need to be flexible and adapt to the financial constraints that mining companies face today. They have to provide long-term project financing or introduce the right international power producer to provide a fully financed, risk- wrapped power purchase agreement. Q: Would you give us an update on Caterpillar's approach to hybrid and solar solutions for the global mining sector? AE: Caterpillar has been partnered with mining companies for more than 40 years, and is now integrating PV solar and energy storage to create a seamlessly controlled microgrid solution with our tra- ditional generator sets and turbines, which are at the core of providing power to run our customers' businesses. We are bringing the best of all technologies together. Cat dealers are uniquely posi- tioned to act as a central resource for providing customers with fully integrated sustainable solutions that are reliable and cost-effective with lower emissions. Q: What has been the response from cur- rent mining clients when you discuss integrating new energy solutions, includ- ing solar? AE: The response has been amazing. Our mining customers rely heavily on Caterpillar for much of their equipment on the mine site already, so our ability to inte- grate these new technologies is just anoth- er way we can provide value. The key to all of this is our dealer service network. It's one thing to integrate the technologies and sell a product, it's the ability to service it and keep it running for the next 20 years that differentiates us from our competition. This material was provided by Energy and Mines, organizers of the Energy and Mines conference in London, January 28–29, 2016. For information on the conference, visit www.energyandmines.com . 82 E&MJ; • DECEMBER 2015 www.e-mj.com O P E R AT I N G S T R AT E G I E S With customer concerns about reliability of renewable energy systems abating, the focus now is on overall cost effectiveness.

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