Cheap and green energy for miners
It may seem somewhat audacious for a company with a market value of $16 million to propose a world-leading energy project nearly one hundred times its value. But, says Petratherm managing director Terry Kallis, if you don’t dream, you don’t get. And he just happens to think he’s sitting on a unique opportunity.
Kallis, on Wednesday, outlined his vision for a $1.5 billion clean energy precinct in the outback of South Australia that would take advantage of the unique combination of geothermal, solar and wind energy resources, the intersection of major gas pipelines, and the proximity of the world’s largest mine and other major developments.
The big opportunity is, of course, to service the massive energy demands of BHP Billiton’s proposed Olympic Dam expansion – which could be more than 700MW at that site alone – as well as other mine proposals or expansions such as Prominent Hill and Carrapateena. Mine managers do not normally think along the lines that Kallis has proposed – they will simply build a new transmission line if a connection is close enough, or build enough gas or diesel to ensure the operations keep going 24/7.
However, BHP Billiton have shown that they are willing to consider all options. As we reported in May, the world’s biggest mining company is effectively hedging its bets around the supply of energy and, after conducting a detailed analysis, is willing to concede that geothermal and solar power have the potential to offer the cheapest form of emissions reductions by the end of the decade, if not earlier, and the cheapest form of energy.
Kallis’ idea is to show BHP the path to get there, and to keep their options open as long as possible, so that they can take advantage of the opportunities when the new technologies are bankable, and can deliver at the costs anticipated. Kallis, of course, has great interest in this, because his company proposes to supply the geothermal energy – and Olympic Dam is too good an opportunity to let slide. "We want to make sure we don’t lose the opportunity to get geothermal into that market,” he says.
Kallis proposes to create a clean energy precinct on the Moolawatana cattle station around 50km north of Petratherm’s Paralana geothermal prospect, and just over 200km from Olympic Dam. The plan calls for an initial 300MW of capacity – mostly gas sourcing fuel from the passing Moomba-Adelaide gas pipeline, and wind – and have that ready by 2016, around the time Olympic Dam would need it. The wind resource is not officially documented, but the cattle station’s name comes from the local indigenous word for “windy place”, so Kallis expects that should not be a problem.
The idea is then to add another 300MW or so of geothermal and solar energy as those technologies mature by the end of the decade, and around the time Olympic Dam would be contemplating its next stage of expansion. The mixture of those four energy sources should provide the miner with the confidence of a secure supply. Kallis says they will be able to deliver attractive hybrid products that lower electricity costs and improve reliability, while also reducing carbon emissions.
Kallis has aligned himself with some unnamed parties – presumably gas, transmission and technology people – and plans to open formal talks with BHP with the view to obtaining a power purchase agreement. Failing that, they will talk to the local utility. Petratherm is, of course, in no position to fund this project, but as it has done by bringing in TruEnergy and Beach Petroleum to partner in its geothermal development, Kallis anticipates there will be no shortage of potential partners.
Of course, Kallis is not the only one to dream of creating a new energy precinct based around the needs of a large mining operation. The so-called “green grid” proposal to unlock huge wind resources in South Australia’s Eyre Peninsula is still awaiting the opportunity to proceed and will rely mostly on an upgraded connection to the eastern seaboard and the Copperstring project in Queensland, a project that was noisily supported by local member Bob Katter and hoped to link Townsville and Mt Isa and open up a string of renewable energy plays in wind, solar and biomass along the way.
However, such was the length of the transmission line that the fate of Cooperstring rested on the support of a single end user in Mt Isa, in this case Xstrata. Despite support from the Queensland state government, the Swiss-based Xstrata board plumped for the easy, not necessarily cheaper, option of a gas fired power station, and Copperstring is now dead. BHP, at least, is alert to the options, and as the country's biggest company with the world's biggest mine, would be aware of strong signal it would send to the broader economy.
Kallis says he has absorbed the lessons of Copperstring. “Copperstring made it quite clear, the commitment of the end user is critical,” he tells Climate Spectator in an interview. “That could be either an anchor customer such as BHP, or a large electricity retailer. I am quite confident that we have got enough players to take this forward.” And if it does go forward, he is even more confident that others will quickly jump on board.
“I think it will excite a few people in the energy market, and in government. Let's see how it pans out. I want to understand the requirements of the customer and then map out a detailed plan.” He hopes to have this in place by Easter next year. If the energy is to start delivering by 2016, there is little time to lose.
Kallis describes it as a $1.5 billion project, but the costings are not very exact at the moment. A transmission line would cost around $500 million, the gas and wind build is probably quite predictable, but geothermal and large-scale solar (most likely with storage) remains to be seen.
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Comments on this article
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The author Sarah Gardner is a reporter on the Marketplace sustainability desk covering sustainability news spots and features. how to speak portuguese
Renewable energy and energy
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The mixture of those four
The mixture of those four energy sources should provide the miner with the confidence of a secure supply. Kalli says they will be able to deliver attractive hybrid products that lower electricity costs and improve reliability, while also reducing carbon emissions. disk space analysis
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Green energy is energy that can be extracted, generated, and consumed without any significant negative impact to the environment. The planet has a natural capability to recover which means pollution that does not go beyond that capability can still be termed green. Thanks. Regards, email lookup
They should definitely go for
They should definitely go for geothermal energy, it's the best renewable energy resource out there!
energy
Clean energy is the future no matter where it comes from, the Sun , fusion, the sea. It is great to see these technologies booming and on the market, just discovered some marine generators for sale and am very interested in purchasing a few.
TRUenergy not so TRUbeliever
Unfortunately, it appears that TRUenergy did not buy the story - not a TRUbeliever?
Air cooling
Just out of interest, Hal, how effective is air-cooling likely to be in the middle of the desert?
Although Brigalow near Kogan Creek has a similar average annual temperature to Roxby Downs, Roxby Downs has higher peak temperatures. Therefore, I'd expect air-cooling to be very difficult (or impossible) in the summer.
I hear that appropriate cooling is a significant challenge for the Geodynamics development near Innamincka, which is a similar climate to Roxby Downs.
All thermal generators need cooling
To Mark Duffett, all thermal generators do not necessarily need water. They need to dump waste heat. Water is one option to suck the waste heat, the other option is air, as in the Kogan Creek air-cooled condensers. Solar thermal and geothermal (as Petratherm is pursuing in Paralana) would not need large quantities of water as long as the plants powered by these sources use air cooling.
out is out
It's certainly true that political risk (safety risk, investment) has taken out a lot of capacity. But mark - nothing to do with technology? I seem to remember Barry Brook telling people on many occasion these incidents wouldn't have occurred with new generation reactors (a week after telling everyone they wouldn't occur with old generation reactors).
Out is out, whatever causes it
I think Mark you are missing Giles point. Nuclear doesn't just have technical risk, it has political risk that engineers are unable to manage.
The political risk is likely an insurmountable barrier for future private financing anywhere in the world after what happened in Japan. It is also what is shutting the existing German reactors and threatening so many others.
all thermal generators need water
@David Osmond, it should also be remembered that solar thermal and geothermal require significant quantities of water as well.
And come on Giles, that's beneath you. You well know that the vast majority of the nuclear that is 'out' in Japan is not due to any fault in the technology.
more unreliables
While others are criticising unreliable intermittent renewables, it's interesting to look at one of the most dramatic periods in recent times on the AEMO network. In June 2007 the mean wholesale price of electricy averaged $210/MWh for the entire month! That's about double the next highest ever month-long average. The main reason for this spike? Most of Australia was in the middle of a terrible drought, and many coal power stations had to be shut down or curtailed due to water shortages. Additionally, there was not much hydro power available. Anti-renewable commentators continually harp on about wind and solar not always being available when needed, but it should be remembered that no power generators are available 100% of the time.
The future has started for BHP
BHP is looking into the future. BHP knows that the “cradle to the grave” type environmental certification of all products is only a matter of time. BHP knows if they can produce for example copper with mostly renewable energy, their products will have a market advantage over a product in the old fashioned “dirty” manner. The demand for uniform global environmental certification will help consumers anywhere in the world to look at the “carbon footprint” of each product.
Terry Kallis and BHP are correct in looking at renewable alternatives instead of looking backwards into yesterday’s technologies. Geothermal energy is a part of the parcel of our future energy supply together with better energy efficiency, fuel cells, solar and wind.
Unreliables
Indeed, like the major industrials that had to curtail production when the nuclear went out in Japan.
Peter, if you read this and the previous story, it's BHP that raised the idea in the first place. Petratherm is merely responding to the opportunity.
OD
Where's the irony, Mark? Uranium is a mainstream, clean source of energy. Geothermal aspires to be. The world needs them both. No irony.
Unreliables
Do you really think BHP would be so incompetent as to risk its multi-billion dollar investment, and its ability to deliver on its contractual commitments to supply its customers, on an unreliable electricity supply?
Two birds with one stone
If BHPB play their cards right, they could get Petratherm to do all the drilling at their most promising (i.e. potential next Olympic Dam) prospect!
But honestly, the irony of floating a hybrid of unproven-at-scale geothermal technology with fossil backup to supply the world's largest uranium mine...if you didn't laugh, you'd cry.