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Gupta to turn Whyalla steel plant “green” with renewables and pumped hydro

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Sanjeev Gupta, the flamboyant Indian-born and British based billionaire who has agreed to buy the ailing steel producer Arrium, has promised to turn the ageing Whyalla steel plant “green” by sourcing electricity from renewables and pumped hydro.

Gupta’s GFG Alliance won a bidding contest for Arrium over a rival offer from South Korea, and sees a complete review of the steel plant’s energy needs as key to making the plant viable and making a return on investment.

Chief among the ideas is to better exploit “co-generation” – using excess heat to generate electricity, and using wind and solar power, as well as pumped hydro to guarantee a regular supply and to overcome, or even profit from, the costly price spikes when demand peaks.

Gupta says the company is looking to invest in wind and solar projects, upgrade the steel plant’s co-generation capabilities, and also look at pumped hydro opportunities using old mine pits.

“One of the great opportunities for Whyalla in particular is pumped storage. The mine pits that are now empty can be used to store water, and that water can then be used to generate energy when there is a lack of energy,” Gupta told ABC radio’s AM program.

“Whyalla is not short of energy …. it is at the moment but it should not be. All you need to do is upgrade the co-generation plant there and there will  be a surplus in power.”

A recent study by the ANU identified 186 potential sites for pumped hydro storage in South Australia, including some in the Whyalla region. It noted that only about 400 hectares of reservoir is required to support a 100 per cent renewable energy grid for South Australia.

EnergyAustralia is currently undertaking a feasibility study into one pumped hydro facility near Port Augusta.

Gupta also flagged that his company’s energy division. Simec Energy, was looking at making direct investments in renewable energy in Australia. It already has a 1GW portfolio in the UK alone, and is looking at expanding that overseas.

Daniel Walton, the national secretary of the Australian Workers Union, which as a creditor has been involved in the negotiations, says he expects GFG to build its own power plant to make the steel operations “viable”.

“The discussions we have had suggest there will be additional power generation …. using renewable energy to power the operation,” he told ABC’s Radio National program.

Indeed, it is becoming increasingly obvious to small and large manufacturers that renewable energy offers the best path to deal with the sky-rocketing electricity bills caused by the bidding practices of the major fossil fuel generators, which have seen wholesale prices more than double in the past year.

Sun Metals, a South Korean zinc refiner with a major operation in Townsville, is building a 116MW solar farm to reduce costs and underpin a refinery expansion, as well as leading a push to change the rules to curb the bidding practices of the big generators and encourage battery storage.

Nectar Farms is going 100 per cent renewable with wind energy and battery storage at its proposed vegetable glass-house in western Victoria, which will be Australia’s biggest glasshouse and will represent a combined $560 million investment and 1,300 jobs.

It had begun to think about taking the plans overseas due to the soaring cost of grid power and gas, but changed its mind when it realised that wind and storage could provide significant savings in power costs.

Telstra is also building a 70MW solar farm in Queensland and has signalled many more to deal with its large energy costs, while a garnet mine in Western Australia is turning to wind, solar and storage to provide 70 per cent of its needs, and eventually 100 per cent, to overcome regular power outages and soaring grid prices.

Meanwhile, many smaller manufacturers and businesses are looking to rooftop solar to offset their soaring grid prices, underpinning a major boost in commercial scale solar to record levels across the country.  

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  • Ray Miller

    The scale of Australia’s failed energy policy and poorly manged NEM is demonstrated by the explosive grow in behind the meter renewables.

  • George Darroch

    Refining makes perfect sense for co-gen. Is it cost that has prevented it from being fully exploited previously?

    • Rod

      Poor investment choices (on credit) rather than investing back into the company.

      http://www.abc.net.au/news/2016-04-07/arrium-enters-voluntary-administration/7306340
      “Arrium ‘should have been repaying debt’

      Morningstar’s senior
      resources analyst Matthew Hodge said Arrium had no choice but to call in
      the administrators if it could not reach a deal with its banks, a big
      investor or a buyer.

      “It was either administration or a deal, it had to do something,” he told ABC News.

      “That
      weight of debt was always going to be a problem and I didn’t see them
      being able to pay that back, so it had to come some other way.”

      Mr
      Hodge said Arrium’s management made a fatal mistake by expanding its
      iron ore mining at the same time other operators were ramping up
      production.

      “They kept on ploughing it [cashflow] back into the
      ground, just reinvesting in other things, they should have really been
      repaying debt rather than reinvesting,” he argued.

      “The problem
      was that all the other mining companies were doing exactly the same
      thing too, which led to the oversupply and the drop in prices that we’ve
      got now.”

      Mr Hodge said Arrium will probably not be the last Australian iron ore miner to collapse either.

      “I wouldn’t be surprised if we see a little more action, particularly in the iron ore space,” he added.”

  • Brunel

    How would this pumped hydro work?

    Is there are big difference in altitude between 1 body of water and another?

    • Hettie

      I think I’ve read that between 100m and 1000m is required, depending on the volume that can be stored in the upper reservoir.

    • David Boxall

      Within limits, the more the better. Commercially-available equipment will give > 76% efficiency on as little as 100 metres of head.

      With most of Australia’s population clustered near the coast, seawater pumped hydro as proved at Okinawa and planned for Chile, looks attractive.
      https://en.wikipedia.org/wiki/Okinawa_Yanbaru_Seawater_Pumped_Storage_Power_Station

    • Mike Westerman

      If you have plenty of space, not much elevation difference is needed. For example, Lewiston Pumping Station, part of the Niagara Falls Generation Station complex, uses an upper storage of 770ha and rated head of only 24m (78 feet) for a 240MW facility.

      • Brunel

        Wow! Just 24 m!

    • Tim Forcey

      ANU’s recent research into SA pumped hydro sites reported here: http://www.abc.net.au/news/2017-06-16/pumped-hydro-sites-identified-in-sa/8623758

  • trackdaze

    Meanwhile “the gentleman” is trying to bring back the 70’s

    • MrMauricio

      the same f-wit “gentleman”who said the Carbon Tax would destroy Whyalla??????

  • howardpatr

    Gupta had best steer clear of out fossilised LNP government.

    • MrMauricio

      and Gautum Adani!!!

      • Mike Westerman

        I would think they are already discussing Adani’s Whyalla solar farm…

  • Tim Forcey

    HEAT PUMPS HARVEST RENEWABLE ENERGY

    “Nectar Farms is going 100 per cent renewable with wind energy”…

    …and renewable ambient heat recovered using heat pumps.

    Don’t forget to mention the heat pumps!

    At the University of Melbourne we found that more renewable energy was being recovered in Australia by heat pumps than by rooftop solar PV panels. Who knew!

    Heat pumps can be used from the residential scale to the industrial scale…

    https://theconversation.com/the-cheapest-way-to-heat-your-home-with-renewable-energy-just-flick-a-switch-47087

    • JonathanMaddox

      Yes well.

      Heat pumps can certainly be regarded as a dramatic efficiency improvement over electric resistance heaters, and if they are renewables-powered then they can also be regarded as an emissions improvement over direct burning of fossil fuel for heat. But it’s sort of nonsensical to say that they “recover”
      renewable energy if they are consuming fossil-fuelled electricity to do so.

      Heat pumps move low-grade ambient energy around whilst consuming electricity, which is high-grade energy that’s mostly produced by burning fossil fuels to run heat engines. Heat pumps do move more energy than they consume (ratio based on their Coefficient of Performance), while conversely a heat engine consumes more energy than it delivers (Carnot efficiency).

      If fossil fuels are powering heat pumps, an equivalent amount of fossil energy is burned, as ambient energy is pumped.

      • Mike Westerman

        Hopefully in southern parts of Australia, “geothermal” heat pumps will form part of the energy storage system, particularly as a means of overcoming seasonal variations in RE availability. Thermal storage underground is relatively cheap compared to batteries! Less useful or practical in northern, cooling dominated regions, but I hope to see solar powered chilled water thermal storage being more widely used there for daily cooling cycles.

        • Tim Forcey

          In most Australian climate zones, “air source” heat pumps work just fine. They are known as reverse cycle air conditioners. Millions of them are heating Australian homes as we speak. So no economic need to spend more money on “ground-source” heat pumps. Read more here: https://theconversation.com/hot-summer-nights-and-cold-winter-evenings-how-to-be-comfortable-and-save-money-all-year-long-51046

          • Mike Westerman

            Importantly, in southern climates with heating and cooling extremes, ground source heat pumps offer significant operational, maintenance and economic advantages. They last longer, are more efficient, quiet, enable seasonal shifts in energy storage/recovery and provide more effective and comfortable indoors climate control (underfloor heating and cooling for example). So they should certainly be looked at for new builds or refurbs, but they can work well with central heating/cooling systems as well.

      • Tim Forcey

        Heat pumps recover renewable ambient heat. Even the Australian government realises this because… If you are purchasing a hot water heat pump, you can earn Renewable Energy Certificates, just as you would if you were investing in a solar PV panel for your roof. But sure enough, many people do not understand how heat pumps work / nor that they recover renewable energy. Thus I shall go on telling everyone… Read more about these renewable energy giants here: https://www.ata.org.au/wp-content/uploads/2014/11/20151222-Vic-Preso.pdf

        • JonathanMaddox

          I was vaguely aware of the RECs for hot water heat pumps, and vaguely supportive because hot water heat pumps displace electric resistance water heaters which convert electricity directly to heat at a 1:1 ratio (and gas hot water, which is far better in emissions terms than electric hot water if the electricity is thermally generated, less so if it is solar, wind or hydro).

          But where are the RECs for my fridge and my air conditioner? Now in July, my aircon is running reverse cycle as a heater and therefore every bit as worthy, surely, as the hot water heat pump. My fridge keeps my kitchen warm in winter too!

          Heat pumps do *not* deliver renewable energy to the electric grid, they *consume* electricity, and at best they partially displace some other consumption of electricity. They deserve incentives only because they improve consumption efficiency of electricity versus old-fashioned alternatives. They do not run on ambient heat, they just move it around.

          • Tim Forcey

            In the UK one can earn Renewable Heat credits from running a reverse-cycle air con in winter to recover free renewable ambient heat. However this incentive is not available in Australia. (Only for hot water heat pumps as mentioned above.)

    • Rod

      Saw this on Flipboard yesterday.
      The latest version uses the AC fan to power itself. Genius.
      http://mistbox.com/
      Still a bit pricey for me. I’ll stick with my DIY version.

  • grantoz

    Well Whyalla is clearly not going to be wiped off the map, but it was no thanks at all to the repeal of the carbon tax!

  • juxx0r

    That’s a bit selfish of them, what about everyone else’s need to distribute power far and wide?

    • Mike Westerman

      Plenty of arid terrain for solar and good wind resources, but not very attractive for pumped hydro around Whyalla, despite the excitement about seawater pumped hydro. OTH, plenty of good sites near grid that can do the job – storage doesn’t need to be need the source: it needs to be near the load.