Making our own luck with clean energy and mining

Australia’s mining boom is a combination of hard work and pure luck. Hard work because it’s tough to be a miner. And luck because our mining boom is being fed by the once-in-a-lifetime growth being experienced in China and India. For possibly the first time in history, Australia is one of the strongest economies in the world: truly the lucky country.

China and India are not just hungry for our gold, aluminium, copper and iron ore; they are also hankering after our fossil fuel resources, and this is driving up the cost of coal, gas and diesel for local users. So right when our mining corporations need more power to mine and export our natural commodities, the cost of doing so is rising. Many commentators also say the mining boom is slowing, meaning miners are looking to improve their efficiency and productivity to reduce their costs and sustain their competitiveness.

But this is where Australia strikes it lucky again. Most mine sites in Australia are in remote locations teeming with renewable energy resources. Australia is the sunniest country in the world and arguably the largest island in the world – giving us huge amounts of sunshine and a coastline that can create unlimited amounts of wave, tidal and wind power. We also have significant geothermal resources with enormous potential to generate clean and renewable energy – once the technology has been proven.

All these resources have the capacity to generate renewable energy to meet the needs of the mining boom.

In the last quarter of 2012 the Australian Renewable Energy Agency (ARENA) announced that it would target off-grid technologies as part of its funding strategy over the next couple of years. And last week it announced $400 million in funding under the Regional Australia’s Renewables program to provide a jump-start for clean energy projects in remote areas.

ARENA intends to give a leg up to clean energy technologies in applications where they may not have been used before, or only minimally – but where they appear to have a lot of potential. Some of the technologies given funding by ARENA will no doubt turn up on the mine sites of the future, playing their part in helping to keep our nation’s economy strong.

Technologies such as off-grid solar are already competitive with diesel, but it is the up-front cost that is the barrier. Once that is overcome, solar is cheaper than diesel generators over the long run. At the moment most mining companies and remote communities have to keep coughing up for diesel to run their generators, and that’s not cheap.

What’s more, the cost of renewable energy has fallen dramatically over recent years and technological advances have increased reliability and predictability. So even when the sun isn’t shining or the wind isn’t blowing, renewable energy can be stored or backed up by diesel or gas in a hybrid system. This means power can be available 24/7, removing the risk of outages that can cause millions of dollars in lost revenue.

Worldwide, mining companies are increasingly turning to wind, solar and other renewable energy sources to meet their growing energy needs. Australian company Pacific Hydro supplies renewable energy to some of the world’s largest resource companies such as Rio Tinto in Australia, CODELCO in Chile and Vale in Brazil (due for completion in 2014). China’s Jinko Solar has announced it plans to build an off-grid, utility-scale solar PV system at a chromium mine in South Africa – the first of  its kind in the country. In Germany, wind turbines have been built to power mines located in the Rhenish mining area.

When you compare Australia’s abundant clean energy resources to what’s available in some of these countries, the obvious question is why we haven’t been doing more to make our own luck by linking mines with clean energy. The conversation between the clean energy and mining industries has already started, but there is plenty of work still to be done. There will no doubt be more collaboration as the cost of renewable energy continues to fall.

David Green is the Chief Executive Officer of the Clean Energy Council