No industry or sector remains untouched by the energy transition. This includes a move towards decarbonisation, with BP reporting that renewable energy is now the fastest-growing energy source, accounting for 40% of the increase in primary energy. Global energy standards have changed, and companies are feeling the pressure to respond to the evolving landscape.

Mining is no exception and the challenge here is arguably even greater, given that it is one of the most energy-intensive industries in the world; it is estimated that the mining industry uses 6.2% of the total global energy consumption. Mining has also historically been an overweight contributor to global warming, through the intensive use of fossil fuels to power operations. But now there is a spotlight on the sector, with increased pressure to move towards renewable energy.

Pressure comes not only from stakeholder groups including shareholders and national governments, but also wider public expectations. Global warming and the impact of fossil fuels is firmly on the global agenda and industries seen to be core contributors are under the most scrutiny.

The mining industry must now look for smarter ways to incorporate cleaner energy solutions into operations, without compromising the reliability of energy supply and ensuring an efficient use of capital to satisfy shareholders and investors. Cleaner, cheaper energy is now a commercial focus and cannot be ignored.

Renewable energy provides a compelling solution. Indeed, Bloomberg New Energy Finance estimates that around 219 MW of renewable capacity was installed at mines in 2017 alone. When looking at this regionally, 88% of new renewable capacity installed in mines has been in North and South America.

While the need for cleaner energy is recognized across the industry, mining companies, more so than others facing the challenge, are conscious of the impact on their balance sheet. One of the key reasons for this is that it is extremely difficult to predict the life span of a mine – for example, a copper mine can operate from anywhere between 5 to 70 years. The CAPEX investment is therefore much more of a consideration as there is an awareness that investing in renewable solutions may only have a short-term gain and leave the business out of pocket with limited return on investment. A complex challenge like this requires a flexible solution. One answer is to incorporate renewables into hybrid energy solutions, which provide combined solar and thermal power optimised with batteries, to remote mines and can be up to 30 per cent cheaper than running thermal generators alone.

For example, the Bisha copper and zinc mine in Eritrea, owned and operated by Nevsun, benefits from a 7.5MW onsite solar plant, alongside a diesel power station. This solution, which Aggreko developed with Nevsun, has allowed the mine operator to cut fuel costs and cut around 10,000 tonnes of CO2 annually.

Rental power is also growing in popularity amongst mining companies, particularly when combined with renewables. The latter responds to the challenge of decarbonisation while rental products keep energy costs competitive and only require an outlay of OPEX, rather than CAPEX. If a mine is only operational for five years, a rental option means the energy source can be moved to the next project, spreading the cost across the life of the equipment rather than limiting its use to one site.

Integrating battery storage into a renewable microgrid is another option for mine operators to consider. This can help to tackle the inherent intermittency of renewable energy generation and provide mine operators with a more reliable and consistent energy supply, which can be easily adapted to the changing power requirements of mines. Batteries can also help to reduce fuel costs by storing excess cheaper renewable energy for later use, reducing the consumption of diesel and minimizing a mine’s carbon footprint in the process.

Aggreko is supporting Gold Fields to introduce renewables at its Granny Smith gold mine in Australia and has signed a contract to build and operate 7.3MW of solar power generation and 2MW/1MWh battery system integrated into the existing gas power station. This will allow the business to leverage the benefits of hybrid energy solutions and provide the mine with additional power flexibility while delivering more sustainable operations.

The impact of decarbonisation on mines can be felt in other ways. Technology has an important role to play in decarbonisation, and the rise of green technology has been increasingly visible in recent years.

Take transport, for example. The International Energy Agency (IEA) reported that the number of registered plug-in and battery powered vehicles on roads worldwide rose 50% between 2016 and 2018, now totaling 3 million. 1 million electric cars were sold in 2017 alone. The trend shows no signs of slowing down, either.

This is driving demand for the materials needed to keep electric vehicles running. While the greatest recent growth in drilling has been base metals, such as gold and copper, there has been a noticeable increase in the need for metals such as cobalt, lithium and nickel, all of which are important component parts of lithium-ion batteries. Most of these metals are also found in remote and inaccessible parts of the world, adding additional challenges for miners to identify cost-effective energy sources.

The growth of green technology therefore provides mining companies with an opportunity to expand the pool of metals that are a worthwhile investment. However, the technology which is dependent on these metals remains in early stages, meaning that mines are rightly cautious about longer-term investment. While keen to capitalise on the next green tech breakthrough, there is reticence to invest fully in one particular metal as the technology pipeline remains fluid. There is a need for a clever approach to planning and balance sheet management, so miners are not caught out by backing the rise of a particular metal should technology shift in another direction. Exploring flexible rental power solutions can be a way of managing this and allocating capital in an efficient way.

It’s clear that mining is a sector undergoing deep transformation as a result of the energy transition. The use of hybrid power solutions at mines is only set to increase, while investment will continue to be driven by innovation in green technology. Mining companies are in the unique position of needing to find their own solutions to green energy whilst being a key component in the supply chain for new low-carbon technology. Finding nimble solutions, such as hybrids or microgrids, provide companies with the agility needed to respond to the quickly-evolving energy landscape.