Oz Minerals looks to solar and storage, signs line deal with solar tower plant

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Oz Minerals to build solar and storage plant at flagship mine in first move to use renewables to supply big mining projects. It also signs a deal to share costs of new transmission line with developer of solar tower plant.

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Oz Minerals, one of Australia’s biggest mining operators, has announced plans to build a solar and battery storage facility at its flagship Prominent Hill mine in South Australia, and will look at further investments in renewables to support other big projects in the region.

The initiative came as Oz Minerals signed a landmark deal with US-based SolarReserve, the developer of the 150MW solar tower and molten salt storage projects near Port Augusta, to share part of the cost of a new 270km high voltage transmission line.

It is believed to be the first deal of its type where costs are shared between a big energy consumer like Oz Minerals, and the developer of a major renewable energy project.

Both parties say that the new transmission line will help unlock new mining zones and new renewable energy projects. SolarReserve, for instance, has ambitions to build six solar tower and storage plants in the state.

Equally important, however, is Oz Minerals’ interest in renewables. It is looking at renewable energy options for the expansion of its Prominent Hill mine, the development of the $1 billion Carrapateena project, and the possible development of West Musgrave.

Solar, wind, and battery storage are all being considered, despite the anticipated fall in wholesale electricity prices in the state over coming years as more wind, solar and storage projects come on line.

Its first initiative will be to build a “modest” solar PV plant, with battery storage, at Prominent Hill, but its new energy plan highlights the fact that it will look at renewable energy options.

“OZ Minerals has received conditional approval for a grant from the South Australian Government to install a solar plant and storage capabilities at Prominent Hill, which is anticipated to reduce grid energy requirements,” it says.

It noted that the grant is valued at up to $2.5 million, and OZ Minerals is currently looking at optimising project plans.

“The solar plant at Prominent Hill will increase OZ Minerals’ understanding and capability with respect to renewable energy and generation sources which may be required for operations in remote locations such as West Musgrave.”

The company also says it is working with a number of potential energy developers to explore and innovate new, additional renewable options across its assets.

It indicated that solar could reduce diesel consumption and lower costs during construction of Carrapateena. It will also install a wind mast at the West Musgrave project to assess the viability of wind generation.

“The further scoping study base case identified solar photovoltaic combined with diesel as a project energy generator. The site presents opportunities for alternative renewable generation as the price point continues to reduce.”

It is also focusing on energy saving initiatives – optimising the use of its ventilation fans with smart controls – which it says could also reduce grid demand by around 15 per cent.

Oz Minerals has previously canvassed solar opportunities as far back as November, 2016, as more mining major become familiar with the opportunities of wind, solar and storage to provide cheaper power than expensive diesel.

Sandfire Resources has installed a 10MW solar plant with 6MW of battery storage to reduce the amount of diesel it uses at its Degrussa mine in Western Australia, while Rio Tinto has a 1.7MW solar array at its Weipa mine which could be expanded to 6.7MW and battery storage.

And BHP Billiton has also expressed interest in solar and battery storage after buying into data from Lakeland solar and storage project that recently opened in far north Queensland.

 Oz Minerals was forced to look at other options after being told by BHP that it could no longer use the line that currently serves the Olympic Dam mine. Presumably that is because BHP has plans to use more capacity as it expands that project.

The new line will mostly run alongside the BHP line. (See graph below).

In total the line will be 270km long with Oz Minerals and SolarReserve equally sharing operational costs for the first 35km of the line, which goes as far as the Aurora project.

ElectraNet has been engaged to provide preliminary services for the design and tender of the new transmission line solution. This preliminary work is underway with the line expected to be operational by mid-2020.

Construction of the Aurora project is expected to begin later this year, subject to confirmation of the $110 million financing promised by the federal government, and obtaining the remaining finance for the $700 million project.

Financial close is expected mid year, but the output of the Aurora plant has been reserved for the South Australia government under a contract that will see it pay around $77/MWh.

“We are excited to partner with OZ Minerals in this key initiative that brings together two private companies to develop a major piece of infrastructure for South Australia, resulting in a well-thought out project that will meet today’s needs and enable tomorrow’s opportunities,” said SolarReserve’s Chief Executive Officer Kevin Smith.

OZ Minerals CEO Andrew Cole said the new transmission line will enhance security of power supply for Prominent Hill and Carrapateena, and provide options to expand those and other projects.

“It has the capacity for additional projects to draw power or input generation, unlocking the Far North for future mining and renewable energy projects,” he said in a statement.

“We look forward to working with SolarReserve to explore additional renewable options for our other projects, such as West Musgrave.”

 

 

 

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9 Comments
  1. Robert Westinghouse 8 months ago

    If business is crunching the numbers and Solar makes sense, what goes on in the minds of our politicians??? Even if you are a fool solar and batteries MUST be on the table

    • handbaskets'r'us 8 months ago

      They are fools -and it’s definitely not on the table.

  2. Farmer Dave 8 months ago

    I think these are very significant and welcome developments. The mining industry is very conservative and as risk-averse as it can be in a risky industry. If hard-headed mining people see that renewable electricity is the future, then why can’t our conservative politicians? The answer surely must be ideological blinkers.

    • Roger Brown 8 months ago

      And brown paper bag$ !

      • Robert Westinghouse 8 months ago

        Correct. They are as straight as a dogs hind leg. This is a nice way to say it….My 10 year old could run the country better.

  3. BushAxe 8 months ago

    This is a great commitment by OZ Minerals which will unlock another renewable zone in Northern SA, they will reap the rewards of lower power prices as developers will be keen to use the excellent solar resources around Woomera/Roxby Downs.

    • My_Oath 8 months ago

      They’ve clearly been keeping a very close eye on the performance solar/battery facility at the De Grussa copper mine. The marginal costs of these assets are what will be key going forward. OZM moving here is a fantastic sign.

  4. Malcolm M 8 months ago

    This new line would be great for new tracking solar, because it is the furthest west in the NEM with strength, and in a desert that is almost as cloud-free as we can get in Australia. Mt Gunson, which is the end of the new 275 kV line, would have its sunset 56 minutes behind Sydney, and Prominent Hill 64 minutes behind Sydney. Data from the Moree solar farm with tracking shows that at the equinox it produces at least 80% of its maximum capacity until 6pm NEM time before dropping rapidly. (Sunset in Moree is only 4 minutes behind Sydney). So a Mt Gunson site would produce at near its maximum rate until about 7pm NEM time, which is about the end of the evening peak in the eastern States.

  5. mick 8 months ago

    ive been a bit sceptical that lnp would try to back slide on aurora with xenophon out of the way,the fact that mining interests want to tap into it should firm up fraundenbergs commitment to fed funding

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