Australia Green Pantone 348 CRGB 0, 135, 81 (#008751)CMYK 100, 4, 87, 18

Cool Gray Pantone Cool Gray 9RGB 109, 109, 109 (#6d6d6d)CMYK 29, 23, 16, 51

Australia Green Pantone 348 CRGB 0, 135, 81 (#008751)CMYK 100, 4, 87, 18

Cool Gray Pantone Cool Gray 9RGB 109, 109, 109 (#6d6d6d)CMYK 29, 23, 16, 51

Powering a Refinery With One of Australia’s Largest

Solar Farms By Kate Dougherty, Energy and Mines

Photo: The solar area for the refinery. Credit: Sun Metals.

Australia Green Pantone 348 CRGB 0, 135, 81 (#008751)CMYK 100, 4, 87, 18

Cool Gray Pantone Cool Gray 9RGB 109, 109, 109 (#6d6d6d)CMYK 29, 23, 16, 51

Australia Green Pantone 348 CRGB 0, 135, 81 (#008751)CMYK 100, 4, 87, 18

Cool Gray Pantone Cool Gray 9RGB 109, 109, 109 (#6d6d6d)CMYK 29, 23, 16, 51

There’s no shortage of controversy surrounding Australia’s path towards a lower-carbon future. The recent blackouts in South Australia have left some miners uneasy about renewables, and advocating for technology-neutral solutions. Other companies recognize the potential renewable energy offers the mining sector, and are proceeding to explore those options.

Sun Metals, a subsidiary of Korea Zinc, is one of them. The firm plans to build a 125 MW solar PV plant that will support a refinery located 15 km south of Townsville, in northern Queensland. Sun Metals aims to ramp up the refinery’s output by 25%, with the new solar array powering that expansion.

Upon construction the $200 million plant will be the largest “behind-the-meter” solar array in Australia. The project concept was developed early last year, and taken to market in September. The market response was highly encouraging, and Sun Metals has been progressing the project as quickly as possible since then. It is currently in the detailed design phase, with completion targeted for the first quarter of 2018. The refinery expansion as a whole will cost $460 million.

Energy prices are a major driver for the project, according to Solar Project Manager Lance Moody. Electricity accounts for approximately 40% of the zinc refinery’s total cash operating cost. “With large-scale solar, virtually all costs are upfront, with only very minimal ongoing O&M costs and no fuel costs,” he explains.

A number of large-scale mineral processing facilities in Australia have been unable to secure long-term energy contracts at competitive prices, and have opted to either close their doors or reduce production as a result, Moody reports. “With Australia’s electricity costs increasing at an alarming rate in recent years, and the cost of solar power decreasing significantly during the same period, solar now makes sense.”

Sun Metals is no stranger to energy-related production uncertainty. Because the zinc refinery currently purchases all of its electricity from the National Electricity Market, it’s exposed to price fluctuations. The company has managed this situation by operating at full load when the market price is low, and restricting production when the price is high. “With solar the price is guaranteed, and therefore production is certain,” Moody says.

The Role of Large-Scale Generation Certificates

Project payback is reduced considerably by large-scale generation certificates (LGCs), Moody says, and with current forecasts and uncertainty about the future of Australia’s Renewable Energy Target (RET), the sooner the project is up and running the better.

He gives the example of a 125MW solar farm in North Queensland, which will generate more than 250,000 MWh of electricity per year.

By Kate Dougherty, Energy and Mines

Powering a Refinery With One of Australia’s Largest Solar Farms

“So each dollar [in the variable LGC price] equates to $0.25 million per year. LGCs have recently been in the $80 range, with recent forecasts indicating the price will hold up to $70 through to 2020 before declining.”

Getting the Plant Off the Ground—Fast

The project has an ambitious timeline, partly owing to the impending drops in LGC prices and rumblings about Australia’s RET. Keeping to the timeline requires the team to progress much of the project development work in parallel. That means Moody and his colleagues need to move on items like environmental approvals, network connection studies, and design works simultaneously. “Any issues with one item likely affects the other, and there is a risk of rework for all items,” he relates.

The project will use 1.25 million solar panels spread out across 150 hectares. West Australia’s RCR Tomlinson Ltd. won the contract to build the array, and First Solar will supply the cadmium telluride (CdTe) solar panels. The array will connect to Sun Metals’ existing 33/132kV substation through an overhead transmission line. The construction phase will create 250 jobs.

Coordinating such a large-scale project on a compressed schedule is a formidable challenge. “A sequenced approach would be much better, but the tight timeframe for the project doesn’t allow this luxury.” Earthworks are scheduled to commence in the middle of May, however, so the project is currently transitioning from the design phase to the construction phase.

Regardless of any near-term changes in market conditions, Moody sees a bright future for solar and other renewables in the country’s mining sector.

“With the high cost of electricity for Australian mines currently and the issue of remoteness for many, hybrid-renewable systems can be used effectively to reduce the cost of production and provide energy security and production certainty for medium to long-life mines,” he asserts.

“Renewables may also create a role for retired mines to be used for pumped storage.” Miners have only begun to explore the possibilities.

Key FactsProject Size 125 MW

Cost $200 million

Construction Begins May 2017

Operational Date Q1 2018

“With the high cost of electricity for Australian mines currently and the issue of remoteness for many, hybrid-renewable systems can be used effectively to reduce the cost of production and provide energy security and production certainty for medium to long-life mines.”

- Lance Moody, Solar Project Manager, Sun Metals

“With solar the price is guaranteed and therefore production is certain.”

- Lance Moody, Solar Project Manager, Sun Metals

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