Why Mining is liable close to 60% Solar PV at Latin America?
Renewables for Mining is an important subject in Latin American (LatAm) mining. Top 21 solar PV facilities in the region (see next table) reach a total annual production of 2,680 GWh with a capacity of 1,181 MW. This figure equals supply the 2008’s Nicaragua country total electricity demand.
- 57.63% of the electricity production and the 50.68% of power capacity flows to the regional mining industry assets.
- These 598 MWp power capacity and 1,545 GWh/yr mining demands equaling the power supply a Latam country as Suriname by 2008.
Why so huge figures to supply mining?
In order to understand the energy importance of mining, we have to get a close look in world mining and energy figures:
- Extractive Industries require about 10% world total primary energy (CIRCE 2010); other sources point to 8%-12% (IEA 2008).
- By 2030 world energy demand will be increased one third of 2014’s energy needs, however extractive industries will grow up in higher degree reaching probably the 15%-17% of world primary energy demand (professors Antonio and Alicia Valero 2015’ personal communication).
- Only the comminution mining stage (ore grinding and milling) demands more electricity than the consumption of Germany (3% of world electricity)
- Mining energy intensity ratio (energy needs per Tone produced) increases annually mainly because of decreasing ore grades.
- Energy efficiency potential in mining comminution is equivalent the annual electricity consumption of Canada (CEEC; 2014)
- If renewables would reach the IRENA’s roadmap goals by 2030 , mining should become the Top 1 renewable energy prosumer sector in the Earth.
Renewables FOR Mining (R4M) and Renewables TO Mining (R2M)
When analyzing Mining and Renewables markets, there is some kind of “market myopia” in terms of the use and /or the sign of PPA, which is the owner and / or offtaker. Depending on the answer of this question Renewables and Mining market shows us sensible different sizes. Maybe best example to understand the precedent concepts were in the analysis of in the Andean copper fringe between the north of Chile and the south of Peru, the main belt for copper porphyry in the Earth providing most of the copper metal for world exports and site of 13 of the 21 top solar PV LatAm current facilities.
In order to solve this analytical challenge, we propose the definition of two market segments depending on the variable linked to business model. Renewables for mining (R4M) responds to mine self-consumption ergo «mining business model». And in the other point of view the Renewables to Mining (R2M) comprises the mining energy consumption providing from the grid or «utility business model».
- Our table shows two facilities of R4M, number 3 (CAP mining) and 16 (Collahuasi mine)
- And eleven R2M facilities: top 1, 4, 5, 6, 9, 11, 14, 18, 19, 20 and 21.
Depending on the location of each R2M facility the mining conversion rates change and, based on the official statistics of Chile and Peru governments it ranges from 42% in the south Peruvian installations to 85% to the northern Chilean ones. R4M’s conversion rate is 100%.57.63% of the electricity production and the 50.68% of power capacity flows to supply the regional mining industry
And So what? What’s next future?
A typical market analysis about Mining and Renewables market in our example would point to a 125 MWp and 330 GWh/y market (R4M).
- But a hidden (R2M) of 473.16 MWp capacity and 1,215 GWh/y consumption is not analyzed.
- R4M represents only the 20.8% of total market in the region
For a correct market development measurement, avoiding “market myopia”, we propose the approach of the sum R4M and R2M, applying the factor correction using official governmental statistics on mining electricity use and, in doing so, showing better solutions for renewables’ business developers in mining regions.
During the next six months (August – December 2016) Chile will develop over 1,000 solar photovoltaic MWp installations and the mining share will increase substantially in the R2M “hidden” market.
Developers, IPP, equipment manufacturers, investors, administration and legal services need to pay attention to these details in order to develop and invest in Renewables for Mining, they should consider this mining approach to renewables to better manage existing facilities and predict future operations in the region.
Dr. Arnoldus M. van den Hurk (Workshops leader of Energy and Mines) will explain details of these studies on the Pre-summit Workshop of Energy and Mines in Toronto: