August 21, 2017

Solar a more cost-effective energy source for Zambian mining – GIZ findings

A recent solar tender by Zambia’s Industrial Development Cooperation for two 50 MWp solar power plants has caught the attention of the mining industry. The best offer was at US¢6.02/kWh, which is a significantly lower price than Zambia pays for emergency solar power, and than mining companies pay for either grid or diesel electricity. An analysis done by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) in its role as facilitator of the project development programme (PDP) and THEnergy shows that local solar-diesel hybrid microgrids have become an interesting alternative. “We have also observed in other countries of the region that industrial players, such as mining companies, lose large amounts of profit due to an unreliable power supply,” says Tobias Cossen, PDP project manager for Southern Africa at. “In Zambia, the negative effects are twofold: severe production losses and higher electricity costs at the same time.”

This development drives mining companies to become more self-sufficient. Zambia has excellent sun irradiation, which has a positive effect on electricity prices from photovoltaic (PV) power plants. “The recent PV tender comes at the right time,” adds Thomas Hillig, founder of the consultancy, THEnergy. “It shows what development solar energy has made in the past few years; 6.02US¢/kWh is competitive with any kind of conventional energy, especially in a region that suffers from a lack of peak power during the day.”

Decentralised power generation in the form of solar-diesel hybrid microgrids has advantages beyond price. It allows for a robust power supply in off-grid or weak-grid areas, such as Zambia, where the grid sometimes poses severe reliability issues. In microgrids, solar power, grid electricity and diesel back-up power can be integrated. Typically, solar energy has priority in these power plants, as hardly any direct cost is associated with the operation of a PV system.

The mines can invest their own capital or can secure long-term solar power supply through power purchase agreements with investors who build a PV plant and sell the electricity to the mine.

 

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