Solar on path to beat diesel, LNG to power remote mines
The increased competitiveness of solar power means that a green conscience is no longer needed for solar to be the fuel of choice for remote mine sites.
A green conscience is no longer needed for solar to be the fuel of choice for remote mine sites, with diesel and gas set to lose out.
The increased competitiveness of solar power means Sandfire Resources’ commitment this month to a combined solar and battery storage project to power its DeGrussa copper mine 900 kilometres north-east of Perth, should signal a trend among miners.
Numbers presented at a Sydney conference this week revealed how the economics of solar already match up against diesel as an alternative fuel for sites too distant to be connected to a power grid. Competitiveness against liquefied natural gas – the other conventional fuel option for remote sites – was only just around the corner.
The calculations presented by Australian Renewable Energy Agency rely on the levelised cost of energy, the typical measure that attempts to compare alternative generation sources. That measure – which divides the cost to build and operate a power plant over its lifetime by its total output – was not the whole story but successfully illustrates the point.
The life of the solar project is, however, important in the equations, given a $50 a megawatt-hour or more difference in that levelised cost for a 10-year and a 20-year project, according to ARENA chief financial officer Ian Kay.
On ARENA’s numbers, a 20-year solar project easily beats a new diesel-based power supply, and is competitive on costs against existing diesel and against a new LNG-based supply. The crossover point against existing LNG comes in 2017.
COMPETITIVE SOLAR
For a 10-year project however, solar becomes competitive against existing diesel in 2017, and not until 2019 against existing LNG with its relatively lower capital expenditure but higher operating expenditure because of fuel costs.
https://www.afr.com/business/solar-on-path-to-beat-diesel-lng-to-power-remote-mines-20150730-gin8u1
