Remote power generation

Renewables will become ‘the’ power source of the future for regional and remote Australia, with energy consumption set to be transformed by innovations in power generation, new lows in solar pricing and the anticipated rapid price reduction in batteries.

Clean Energy Finance Corporation (CEFC) CEO Oliver Yates said a pioneering solar and battery storage project in remote Western Australia, which has just become fully operational, demonstrates that renewable energy will increasingly become the preferred energy of choice.

The CEFC helped finance the innovative solar and storage project at Sandfire Resources’ DeGrussa Copper-Gold Mine, which will substantially reduce the mine’s diesel consumption and cut overall emissions.

“This is an important project of scale that demonstrates the potent combination of solar and battery storage and the benefits this brings to remote regions,” Yates said.

“DeGrussa has delivered a unique combination of an off-grid, high-capacity solar power array and battery storage fully integrated with an existing diesel-fired power station.

“The $40 million DeGrussa Solar Project has involved the installation of a 6 MW lithium-ion battery storage facility, powered by more than 34,000 solar PV panels on a 20-hectare site near the mine. The CEFC committed $15 million in debt finance to the project, which also received $20.9 million in recoupable grant funding from the Australian Renewable Energy Agency (ARENA).

“While this development also benefited from grant funding, the project shows the clear economic potential for off-grid renewables in regional and remote Australia. With this project now operational, and given the price reductions we are seeing in solar and batteries, the economics of remote solar and storage are becoming attractive even when oil prices are low.

“Soon remote communities and mines will be able to reduce the need for expensive trucked-in diesel used in dirty generators. This project demonstrates the financial, health and environmental benefits that moving towards renewable energy solutions can provide,” Yates said.

In 2013, AECOM estimated that using diesel for electricity generation cost between $240 and $300/MWh (for diesel costs only) for larger mines and up to $450/MWh for communities and smaller industrial loads, depending on the efficiency of the diesel unit. By contrast, AECOM found that the levelised cost of electricity (LCOE) of solar PV on a typical remote mine site was around $226/MWh without grants or subsidies.

“Today the LCOE has fallen to below $100/MWh, meaning adding batteries to systems is increasingly making good economic sense,” said Yates.

The DeGrussa project is the largest integrated off-grid solar and battery storage project in Australia. The project is owned by leading French renewable energy firm Neoen, with juwi Renewable Energy responsible for the project development, EPC and O&M.

Perth-based surveying and infrastructure construction company OTOC Limited constructed the plant.

The project is expected to reduce the mine’s annual diesel consumption by about 5 million litres and cut carbon emissions by more than 12,000 tonnes of CO₂ annually — a reduction of more than 15% based on reported emissions for the 2015 financial year.