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Australia backs Gold Fields' renewable energy plans - BusinessLIVE

Wednesday, 19 June 2019

Second Australian renewable energy scheme secures government support and stands in stark contrast to the stalled solar projects of miners in SA

Gold Fields has agreed an A$112m investment in its second major renewable energy project in Australia, showing the stark contrast between that government’s attitude towards alternative electricity sources in the private sector and that of the SA government.

The Agnew mine joins Gold Fields’ Granny Smith mine in Western Australia in turning to renewable energy to become more environmentally friendly and lower cost, reducing exposure to potential emissions penalties.

In its 2018 annual report, the company said it was conducting studies into installing 55MW of solar and 18MW of wind-generated electricity at its Australian, one South African and two Ghanaian mines.

“Our investments in renewables will result in solar and wind being added to our supply mix, initially at our Australian mines, where it is set to reach at least 10% of total energy usage by 2020,” Gold Fields said in the report.

Granny Smith will have 8MW of solar energy by the end of 2019 along with batteries capable of storing 2MW.

The project at Agnew, a 240,000oz-a-year gold mine, won the backing of Australia’s government and secured an A$13.5m or R135m investment from the Australian Renewable Energy Agency, which was negotiated within just four months.

“The project Gold Fields is undertaking will provide a blueprint for other companies to deploy similar off-grid energy solutions and demonstrate a pathway for commercialisation, helping to decarbonise the mining and resources sector,” said agency CEO Darren Miller.

Gold Fields joins EDL, an Australia-based global energy company, in the R1.12bn project to create a micro-grid that will be owned and operated by EDL.

EDL will recoup its investment from the tariffs imposed on Agnew during a 10-year contract.

“Due to the multiple technologies integrated into the project, if the renewable energy contribution to the project is high — as is envisaged for most of the time — the cost is comparable to the gas/grid option. But if it is on the low side the energy cost will be higher,” Gold Fields said.

While lithium-ion batteries were chosen because they were “the most mature and lowest-cost product to meet the technical requirements of the project — the battery’s duty is high power over short periods” — the team would explore vanadium batteries in the future, it said.

The uncertainty and regulatory obstacles thrown up by SA’s approach to renewable energy have stalled similar efforts in SA, with Gold Fields, Sibanye-Stillwater, Anglo American Platinum and Orion Minerals all lining up solar projects but unable to get government approval to implement them.

“Due to regulatory uncertainty around the use of private power purchase agreements, South Deep has delayed the signing of a 25-year power purchase agreement with an IPP (independent power producer) for a 40MW solar photovoltaic facility at the mine,” Gold Fields said in the annual report.

“We are exploring ways to develop the facility incrementally in line with government’s recent integrated resource plan, which for plants with a generation capacity above 10MW requires both ministerial exemption and a power generation licence for IPPs,” it said.

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