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Renewable energy for industry next big thing for Australia, says IEA

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A new report from the International Energy Agency has confirmed what is becoming increasingly obvious to many in the Australian market: that the business case for substituting grid electricity with self-generated renewable power is proving more and more persuasive – not just for home owners and businesses, but for major industrial energy users.

The newly published IEA report, titled Renewable Energy for Industry, finds that clean energy resources including solar, hydro and and wind power have enormous potential for use in industrial processes, offering cheaper sources of power and an opportunity for greater emissions reductions.

And Australia – among other regions where renewable energy resources are considered to be “especially abundant” – offers some of the largest and highest-quality potential for industry to make the switch.

“The recent rapid cost reductions in solar photovoltaics (PV) and wind power may enable new options for greening the industry, either directly from electricity or through the production of hydrogen (H)-rich chemicals and fuels,” the report says.

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In places like Australia, it notes, “the cost of hydro, solar and wind power can fall below $US30/MWh  ($A39/MWh) and supply an electricity load with high load factors, particularly when combined.”

That figure is less than half current wholesale market prices. And it reflects on Gupta’s assessment that solar and storage will cut costs for the steel works by around 40 per cent.

Of particular benefit, however, is the direct integration of renewables into industrial assets, which the report says promises to reward businesses “beyond the benefits they would derive from the simple purchase of renewable power.”

These benefits include hedging against fuel and grid price volatility; improved energy supply reliability; increased productivity; and additional revenue opportunities through sales of excess energy to the grid, heat networks, or to other industries.

This will come as no surprise to the likes of British billionaire Sanjeev Gupta, who is in the process of transforming his newly acquired Australian steel business into a renewable energy powerhouse, via massive investments in solar and storage that will knock 40 per cent off his electricity costs.

Gupta last month confirmed that he would build 1GW of dispatchable renewables in and around Whyalla, where his major steel plant is located, including solar, battery storage, pumped hydro and demand management.

He is also looking to follow this up with varying mixes and scale of renewables and storage to power the company’s steel operations in Melbourne, Sydney and Newcastle, which he plans to power 100 per cent by renewable energy.

And the report, too, touches specifically benefits of processing iron ores directly in areas with excellent renewable resources.

“Indeed, several of the world’s largest iron ore deposits are located in southern Brazil, western China, Mauritania, northern Chile, South Africa and Western Australia, and are relatively close to areas with excellent resources,” it says.

“Processing it into steel on the spot …would keep it hot and thus save energy in arc furnaces and benefit from lower electricity costs.”

And it doesn’t stop there. Korean zinc refiner Sun Metals began building a 116MW solar farm in May this year – south of Townsville, in Queensland – which the company expects will provide around one-third of electricity demand for its refinery business, while also underpinning its plans for expansion.

“This is a large refining company that views solar as better alternative to their current power solution,” said Jack Curtis, regional manager Asia Pacific for First Solar, the company commissioned to build the Sun Metals plant.

“This project represents the viability of the commercial and industrial solar market in Australia and the growing trend of major energy consumers owning and operating renewable energy assets.”

And other industries are jumping on board. The report notes that in Australia, international fertiliser company Yara has announced plans to build a pilot solar ammonia plant in the Pilbara region of Western Australia, which could be in service as early as 2019.

According to Ammonia Energy, the cost-competitiveness of renewable ammonia with natural gas ammonia was a major topic of the a recent industry conference in Rotterdam.

“Thanks to the recent cost reductions of solar and wind technologies, ammonia production in large-scale plants based on electrolysis of water can compete with ammonia production based on natural gas, in areas with world-best combined solar and wind resources,” the IEA’s Cédric Philibert – who also authored the Renewable Energy for Industry report – told the conference.

In this latest IEA report, Philibert notes that Siemens is also running a pilot ammonia plant with a 20MW wind farm. The industrial giant has also, reportedly, been “in discussions” to develop a massive solar field in the Australian desert that “would produce 1 million tonnes of ammonia per day, roughly twice today’s total global production capacity, for export as a carbon-free energy commodity.”  

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  • Grpfast

    While the LNP supports big coal and its generators its focus has forgotten all the other supporters in industry. Renewables are their focus. WAKE UP Malcolm, if you have any future left.

  • david_fta

    Is it just me, or are other people surprised that there’s a pro-coal mining ad on this page?

    That ad “New Acland mine means our town survives. Vote to …” is New Hope Mining’s astroturf campaign to get the Q Govt to overturn the Qld Land Court’s rejection of New Hope’s Acland Stage 3 mining application.

    • Mike Westerman

      Not on my page so Google must’ve checked where you live!

    • Craig Allen

      Those are ‘remarketing’ ads that the advertising company has put on the page based on sites you’ve previously visited, your demographics and the advertiser’s audience selection. Most of the the ones I’m seeing are for solar, but I do see fossil propaganda from time to time. Reneweconomy earns revenue for allowing the ads to be on the site, but doesn’t choose the specific ads. Think of it this way — the fossil fuel companies are accidentally funding a pro-renewables media outlet by having clumsy and ad targeting.

      • david_fta

        Thanks for the explanations, Messrs Allen & Westerman.

        For what it’s worth, I’ve previously encountered New Hope’s astroturfing on Fairfax Media, so I wrote to Fairfax the following letter:

        5 Oct, 6:30 pm AEDT

        “New Hope is a coal company that has already all but destroyed the Darling Downs town of Acland with Stages 1 and 2 of their “New Acland” Coal Mine – but in a first for Queensland, the Qld Land Court has rejected their application to commence mining Stage 3. Instead, the Court has accepted the evidence of local landholders about how the mine expansion would destroy what remains of the best farming land in the Toowoomba region: https://www.thechronicle.com.au/news/farmer-fears-for-integrity-of-best-land-toowoomba/1749770/

        “Rather than accept the Court’s findings, New Hope have set up an astroturf campaign, “Save Our Regional Towns” (https://saveregionaltowns.com.au), for which they’ve taken out ads with Fairfax. This is all well and good, except that New Hope’s extra-legal campaign to circumvent the Court’s decision is the height of hypocrisy. Not only will mining destroy the viability of surrounding farms, but the noise and dust of mining operations to date has already driven most of Acland’s one-time residents to abandon their homes (http://www.abc.net.au/news/2016-08-09/acland-ghosts-return-to-queensland-town-for-census-night/7704250).

        “I am deeply disappointed that Fairfax allows itself to be used in this manner.

        “NB: I am separately emailing this letter to SMH Environment Editor Peter Hannam. He might be in a better position to explain these issues to the advertising department.

  • Ian

    British billionaire, Gupta; Korean Zinc refiner; International fertiliser company Yara; Sieman’s ammonia plant. Hard to get excited about major non-Australian interests in this country , renewable or not.

  • Geoff Roberts

    1000000 tons/day of Ammonia is a lot when a world scale conventional ammonia plant produces only that much in a year! Are editors sure that someone hasn’t made an error here?

    Ammonia is proposed as being useful as a convenient way to ship renewable energy from places where there is a surplus, like Australia to places with limited resources, like Japan or South Korea. It is safer to handle than hydrogen.

  • Tim Forcey

    DON’T FORGET HEAT PUMPS!

    In addition to “solar, hydro, and wind”, the IEA report also highlighted other resources/technologies including:

    bioenergy (OK, one could call bioenergy another form of “solar” I suppose),

    recovering energy from “waste heat” with heat pumps and mechanical vapour recompression,

    and also recovering renewable heat from the air with air-source heat pumps. (OK again I suppose one could call air-source heat pumps another form of “solar” energy).

    Bioenergy is the big one re replacing fossil fuels for process heat. Similar to what was found by Keith Lovegrove et. al. http://www.itpau.com.au/re-for-australian-industrial-gas-users/