McKinsey & Company has presented a report that shows that electrifying the mining industry on a global scale in order to lower carbon emissions would require a massive amount of extra power.
As mines are working to do their part in the transition to a net-zero economy, this is a tricky conundrum – how can mines meet the potentially huge electricity demands?
Renewable energy is, of course, the way to lesson the carbon footprint of electricity production. However, whether it is feasible to use renewables to try to meet future electricity demands is uncertain. Mines will need access to renewable energy in order to achieve what they are required to by 2050 – at least an 85% reduction in their carbon emissions – so we will soon find out.
The cost of electrifying mines
Looking at the global iron ore industry
To give an idea of just how much power electrified mine sites require, McKinsey & Company shares findings that show how much electricity it would take to electrify the mobile fleet of the world’s iron ore industry.
The answer? An additional 11 gigawatt-hours of electricity per metric tonne of ore. For the industry as a whole, the extra electricity required would amount to 20 to 30 terawatt-hours of electricity.
McKinsey gives the example that replacing diesel-powered trucks and other heavy equipment in mines with BEVs (battery electric vehicles) will increase electricity expenditure more than twofold.
Meeting new enormous energy demands in order to electrify mines, and doing so using renewable energy sources, would come at a cost.
As well as the need for large capital expenditures and finding new sources of funds, there would be a need for improvements to infrastructure, as well as improvements to BEV technologies.
McKinsey & Company gives the estimated expenditure required to electrify the global iron ore sector as $30-45 billion.
Batteries that power EV fleets in mines would need to be produced on a larger scale, be cheaper, and charge faster in order for electric equipment in the mining industry to be competitive and a viable solution for mines.
In terms of infrastructure, mines would have to take into account the need for infrastructure allowing for renewable power production or storage and so would need to install renewable power grids, or outsource renewable energy from contractors for powering their operations.
Miners would also need to upgrade their electric grids and build more substations and networks along with other infrastructural changes.
Electrifying mines could generate value in the long term
In the long term, once large short-term expenditures and infrastructural adjustments have been made, things could even out and, if mines use lower-electricity demand options to power their electric mines, electrified mines could generate long-term value and even eventually cut down on electricity costs.
There are ways to lessen the power usage of electrified mines; McKinsey points out miners have other options in terms of EVs and low-carbon vehicles, saying that there are electric vehicles that use less power as a possible choice as well as hydrogen-powered vehicles, or those powered by other renewable power sources.
These could be used instead of BEVs, which require a lot of electricity due to their batteries.
The long-term benefits of electrifying mines
Mines that go fully electric could lighten their carbon footprint by 60-80%, aiding in the transition to net zero, avoiding carbon taxes, and possibly capturing green-product premiums.
They could also reduce their power costs by 40-70% and pay around 30% less for maintenance of mobile equipment.
McKinsey also adds that there is more versatility when it comes to how electric vehicles can be used; for instance, they could allow for steeper ramps, faster cycle periods, and more.
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