Within mining the idea of renting clean, reliable hybrid power is gaining traction as Aggreko signs up offtakers in Australia and Africa for its microgrids-as-a-service model.
With the platform Aggreko can develop different combinations of hybrid microgrids that clients pay for via a rental-based agreement. Configurations include solar PV-fossil fuel generation (diesel or gas), as well as solar PV-battery-fossil fuel generation.
Initial projects using the new platform are in Australia and Africa but Aggreko, which owns energy storage player Younicos, is targeting off-grid power markets, including remote communities and emergency power/disaster relief, as well as mining, as far afield as India, south-east Asia and Latin America. In these markets commercial and industrial power users connected to weak grids would also benefit from the model.
Solar-battery-thermal microgrid for Oz gold mine
Recently, Aggreko introduced solar-plus-storage using Younicos’ battery storage integration and management technology at Gold Fields’ Granny Smith gold mine in Western Australia, having won the contract to build and operate a 21MW power station in 2016. The company initially installed a gas-fuelled reciprocating engine at the mine two years ago and plans to integrate 7.3MW of solar PV power generation and a 2MW/1MWh battery system, with the existing gas supply as a hybrid power station.
According to Karim Wazni, managing director of Younicos microgrids-as-a-service, which is a form of rental agreement, minimises capital outlay. The rental contract is an adaptation of the power purchase agreement (PPA), widely used in the power industry, which is signed between an offtaker, such as a mining operation, and the power supplier or producer.
Wazni explains: “Most microgrids that include solar PV are profitable from about year five. Because we don’t profit from selling fuel, we are incentivised to displace as much fuel as possible either through fuel efficiency and plant optimisation or through renewables. The contractual flexibility that Aggreko offers also allows customers to cost-effectively adjust capabilities to potentially changing future requirements.”
Cheap and reliable, with the emphasis on reliable
According to Sandfire Resources, the owner of the DeGrussa mine in Western Australia, which runs on power from diesel fired power generation integrated with a solar-storage system supplied by Juwi, mining companies expect, whatever the source of power – be it fossil fuel generation, or renewable – to be reliable and cheap, or competitive, and they expect to have a contract or point of contact with only one power supplier.
Wazni agrees: “It’s clear to us that customers want a single power provider to cater to all their needs, including the integration of renewables. This is actually the unique selling point that we were able to provide to Bisha Mining Share Company (BMSC), our first hybrid customer at the Bisha mine in Eritrea.”
The project is the first to commercialise Aggreko’s microgrids-as-a-service platform. BMSC’s copper and zinc mine in Eritrea is being equipped with a solar PV-plus-diesel hybrid system, which will reduce fuel costs by more than 10%. Under the 10-year rental agreement, the mine will be powered by a 22MW diesel plant integrated with a 7.5MW PV system.
From an offtaker’s standpoint, working with one power supplier minimises technical complexity and potentially misaligned incentives between two power providers. Having more than one results in additional technical risk for the customer and a lack of clarity on accountability.
“Our experience is that mining customers are extremely focused on reliability of their power supply and were not willing to compromise on it no matter how much fuel savings were promises thanks to renewables,” adds Wazni.
He says BMSC was concerned about the loss of reliability of the power station because of the intermittency of solar power.
“We addressed that by carrying out detailed electrical studies of their system as well as performing tests with real hardware to show how effectively our control system could manage solar power and its interaction with the diesel generation plant. We also backed this with strong commercial guarantees,” says Wazni.
A little (grid-forming) battery power goes a long way
The microgrid opportunities Aggreko is targeting range from a minimum of 1MW of customer load. “There is no real upper limit. The basic building blocks that we use for batteries, solar and thermal generators are 1MW as well,” he says.
A relatively small battery can go a long way. Depending on local solar irradiation patterns and demand requirements, solar PV on its own can contribute a maximum of about 20-25% of the load, which translates into 10%, or slightly higher, in savings.
Because of solar’s intermittency, customers and companies that value reliability do not want to reduce the fossil fuel power generation installed capacity when adding only solar into the mix. Solar PV reduces fuel consumption but not the equipment on-site. When a battery storage system is added, a crucial function is to provide system stability, allowing all other components to be deployed in the most efficient way. The battery will also shift a little energy from the solar peak, but the precise operational pattern will depend on local conditions.
“Even with a one-hour duration, grid-forming, battery added into the mix, the solar share rises to 30-35%. The battery, rather than the thermal units, are now holding the grid stable. They can even be switched off if their energy isn’t required,” Wazni explains.
For the same reason the battery also allows the thermal units to be run more efficiently, which again reduces fuel. Because the battery also provides N-1 security it may even reduce the total number of thermal units required.
Aggreko deploys generators and batteries that are containerised. Shipping and delivery to site and commissioning can take a matter of weeks. Solar plants require construction, so it can take a minimum of six months depending where the project is located, size and local regulations.
Wazni cites interest from across the global mining sector, in light of successful deployments and rising fuel prices. “Mining juniors and mid-tiers are more constrained by capital and see an opportunity to save money thanks to hybrids, while the top 10 firms have tended to start from a stronger corporate social responsibility agenda but have realized that there can also be interesting economic benefits.”