Market potential of CSP in the mining industry worldwide
With mining industries consuming an average of 9.6 quadrillion Btu (2.8 *106GWh) per year – a figure that is rapidly growing – it is not surprising that the industry is looking to new areas to satisfy the demand. Can CSP help?
Using an optimistic, conservative and pessimistic scenario, CSP Today experts offer insight into what portion of the global mining industry’s energy consumption CSP can hope to cater for.
Industrial applications the largest energy consumers
In the year 2008 the world energetic consumption (primary energy) was 505 quadrillion British thermal units (Btu) i.e. 148*106GWh, which represents the total energy utilized by humans on this planet. . Out of this, the industrial sector consumed 52% of global delivered energy in 2008. The total world energy consumption according to various sectors is given in Table 1 . Assuming that the world population in 2008 was ca. 7 billion, the average per capita energy consumption turns out to be 21 MWh/year.
Table 1: Total world energy consumption by sector.
In the International Energy Outlook (IEO) 2011 reference case, it is found that world marketed energy consumption would grow by 53 % from 2008 to 2035 at an average annual rate of almost 2%. Total world energy use would rise from 505 quadrillion Btu (148*106GWh) in 2008 to 619 quadrillion Btu (181.4*106GWh) in 2020 and 770 quadrillion Btu (225.6 *106GWh) in 2035 as shown in Figure 1. Under this scenario, it is expected that the industrial sector would remain the main energy consumer, accounting for half of the total world energetic consumption.
Figure 1: World energy consumption from 1990 to 2035. (in quadrillion Btu)
Energy consumption in the mining industry
It is forecasted that the energy consumption of the industrial sector will grow by an average of 1.5 percent per year over the projection resulting in a growth from 191 quadrillion Btu (56*106GWh) in 2008 to 288 quadrillion Btu (84.4 *106GWh) in 2035 requiring large amounts of new installed power. The mining industry is an important consumer of energy within the industrial sector and it is assumed that it consumes up to 5% of the total energy consumed by the industrial sector. This means that the mining industry consumes currently on an average 9.6 quadrillion Btu (2.8 *106GWh) per year. Based on the estimates of IEO2011 related to the increase in energy consumption by the industrial sector, the energy consumption by mining industry is forecasted to increase to 14.4 quadrillion Btu (4.2 *106GWh) by 2035.
Most of the energetic consumption in the mining industry is related to the use of electricity and heat drawn from fossil fuels. Is there a more renewable option? In previously published articles we have highlighted the unique benefits that CSP has to offer the mining industry. Now we examine just what portion of the global mining industry CSP is likely to secure.
Potential of CSP in mining industry
Due to the adverse effects of climate change and global warming, most of the developed nations of the world have committed to reduce their consumption of conventional fossil fuels and replace them with non-polluting renewable sources of energies like solar, wind, biomass and the like. In one scenario the EU has pledged to substitute 20% of its electricity requirements with renewable energies by the year 2020. In the present case, the figures obtained from IEO2011 have been used as reference for the calculation of the potential of CSP in mining industry.
As it was already mentioned, IEO2011 predicts that the energy consumption of industrial sector would increase from 191 quadrillion Btu (56*106GWh) in 2008 to 288 quadrillion Btu (84.4*106GWh) in 2035. Under the assumption that the mining industry would consume 5% of the industrial energy consumption (as it is the case nowadays) the mining industry would consume 14.4 quadrillion Btu (4.2 *106GWh) in the year 2035. Based on that it is expected that at least 1 quadrillion Btu (7% of the total mining consumption) will be provided by renewable energy sources.
It is not feasible to install CSP plants at all the mining locations of the world because the solar radiation necessary for CSP plants (DNI) is not available at all the places where mines are present. In addition, other resource requirements like availability of water and land. also affect the deployment of CSP plants for mining industry .At the same time, the deployment of CSP plants will be limited as CSP technology is still in its early phase of development. There are also other factors such as financial viability and a proven track record. which will affect the deployment of CSP plants in the mining industry. All these factors have been considered to determine the market potential of CSP in mining industry.
Now, the share of CSP in various mixes of renewable energies that will be used to supply the expected 1 quadrillion Btu (0.29*106GWh) of renewable energy to mining industry is modeled by taking into consideration three different cases: pessimistic, conservative and optimistic. In the pessimistic case it is assumed that 15% of the total renewable energies contribution to mining industry (i.e. 0.17 quadrillion Btu (51000 GWh) will be provided by CSP. In the conservative and optimistic cases this share of CSP increases to 30 % and 45% respectively.
The capacity factor (CF) of CSP plants is generally in the range of 20% to 40%, depending on the solar resource available, technology and the configuration of the plant. To determine the market potential of CSP in mining industry, an average capacity factor of 35% is assumed. Based on this, the market potential of CSP in mining industry is calculated. The results show a potential of CSP in mining industry in the year 2035 of 16.6 GW (pessimistic scenario), 33.3GW (conservative scenario) and 49.9GW (optimistic scenario). These values represent the actual market potential of CSP in the mining industry with the assumptions mentioned above.
Figure 2: Market potential of CSP in mining industry for three different cases.
These figures are also in line with the various investments that are happening and are forecasted for the mining industry. Energy costs are estimated to represent more than 15% of the total cost of production in the mining industry . During 2011 at least 136 new mining investment projects with a total estimated cost of US$74 billion were noted in company annual reports. The entire project investment pipeline was considerable – amounting to US$676 billion overall by the end of 2011.
Whether a mutually beneficial relationship can be developed between the lucrative, energy-intensive mining industry and the fledgling CSP remains to be seen. In the next article we examine the technical challenges of integrating CSP into the the mining industry to shed further light on this question.
Editors note: on 8 July 2013 CSP Today will be pubishing an article investigating the technical implications of integrating CSP into the mining industry, using the extraction of copper as a case study.