Many people see renewable energy and fossil fuels as mortal enemies. One will succeed only at the expense of the other, the thinking goes. When it comes to onsite power, however, the situation reveals a more complex relationship. Renewable energy technologies can help fossil fuel developers power their mining and drilling operations.

Mining and drilling operations often sit in remote areas, far from established electricity infrastructure. Yet, they often have significant power needs—on the order of tens of megawatts (MW) and tens of gigawatt-hours (GWh) per site.

Traditionally, diesel generators provided this power. However, they are expensive to fuel ($0.28-$0.32/kilowatt-hour, by one estimate). Energy costs can represent 20-40% of mining operational costs. Further, regularly trucking in large quantities of fuel represents a risk if that supply is disrupted by bad weather, poor infrastructure, or other barriers.

New options offered by wind and solar:

Companies are slowly but steadily installing renewable energy at or near their sites to power at least some of their operations. By one estimate, the mining industry alone spent $209 million in 2013 on renewable energy investments. This makes sense, since the recent cost of onsite wind and solar power can be half that of diesel generators. Examples of recent projects include:

Hybrid microgrids balance fossil and renewable power benefits:

Hybrid microgrids mark another common strategy for providing onsite power. They involve a combination of power sources, usually diesel or natural gas generators combined with some renewable resources. Although many mining and drilling operations are active 24 hours a day, renewables provide power only during the day (solar) or afternoon and evening (wind). However, the fossil fuels can provide power at night. Thus, the power sources are integrated into a single electricity grid to provide continuous power throughout the day. Recent projects include:

Advanced storage extends the capabilities of hybrid microgrids:

Further still, the most complex power projects take the hybrid microgrid approach and add next generation battery storage. Fortunately, battery technology has advanced rapidly in recent years to keep up with the need to store increasingly large amounts of renewable energy. A variety of new battery technologies can now store larger amounts of power with lower cost and physical footprint. Therefore, adding these to a hybrid microgrid allows the miner or driller to capture excess renewable power. The excess power can be used at night. The fossil fuel source remains part of the grid to provide power when the batteries are depleted. Recent projects include:

Renewable adoption will accelerate in coming years:

Despite these advances, renewable energy currently provides only a small fraction of power at mines and wells. This will likely change, and quickly, as prices for renewables and advanced storage continue their steep declines. By one estimate, investment in renewables just for mining will reach nearly $4 billion by 2022. That represents more than a tenfold increase from a decade before. Relatedly, the Sunshine for Mines analysis thinks mining companies alone can reach 8GW of renewable power by 2025.

Can renewable energy technologies support mining and drilling? A growing number of companies are answering “Yes”. As new advances in onsite power develop, PreScouter will keep you up-to-date on the evolving relationship between these seemingly bitter rivals.

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