SolarReserve to make Aurora heliostats in Australia; Miners poised to hunt renewables contracts: Fitch

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SolarReserve's Aurora CSP plant will replace decommissioned coal-fired capacity in South Australia and provide power across evening peak demand periods. (Image credit: John Kirk)

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SolarReserve signs Australian heliostat supply deal for Aurora project

U.S. CSP developer SolarReserve has signed a Memorandum of Understanding with Australian firm Heliostat SA for the supply and assembly of heliostats for its 150 MW Aurora Solar Energy Project near Port Augusta, South Australia.

The AU$650-million Aurora project will use SolarReserve’s CSP tower technology and include eight hours of molten salt storage. Last year, the Government of South Australia awarded U.S. developer SolarReserve a 20-year power offtake agreement at a maximum price of AU$78/MWh. The plant is scheduled to come online around the end of 2020.

Heliostat SA emerged from manufacturing group Precision Components after the company shifted its focus away from automotive lines towards high value add specialized products.

The new partnership with SolarReserve will create 200 jobs in South Australia, including over 115 unique skilled labor positions related to manufacturing of steel components and heliostat assemblies, the companies said in a joint statement.

"The two companies are working together to complete the final agreement, which includes achieving as much local content and labour as possible," they said.

Each of the heliostat assemblies incorporates 96 square metres of glass plus steel supports and electric drives.

The Aurora plant will help address South Australia's peak demand challenges with carbon-free generation. In the summer, power prices surge across peak demand periods in the late afternoon and evening hours.

The project is being developed with the option to add PV technology to provide power during the day and maximize CSP electricity generation during evening peak demand periods.

"The addition of PV could broaden the scope of Heliostat SA’s manufacturing supply to include PV racking systems," the companies said.

                   Australia quarterly base futures prices by region

                                                         (Click image to enlarge)

Source: Australian Energy Regulator (AER)

The Aurora project is expected to create 650 full-time construction jobs on site, and more than 4,000 direct, indirect and induced jobs in the region, according to SolarReserve.

The California-based developer hopes to build six solar thermal projects in South Australia over the next ten years.

“The Aurora project along with SolarReserve’s future investment in the state will develop a supply chain and local manufacturing expertise that can be leveraged across the broader region," Tom Georgis, SolarReserve’s Senior Vice President of Development, said.

Mining companies to seek out solar, wind contracts as costs fall: Fitch

Mining companies will increasingly turn to solar and wind power in the coming years, attracted by lower costs and environmental targets, Fitch Solutions said September 7.

Most mining companies continue to rely on fossil fuel-based grid power or off grid diesel units. Falling costs and an increasingly-favourable regulatory environment will see more miners seek out solar and wind contracts, particularly in the Americas where companies can benefit from existing renewables infrastructure and carbon pricing mechanisms, Fitch said.

Falling costs will be the main driver of demand from mining companies. Energy costs currently account for approximately 30% of miners' balance sheet costs, according to some estimates.

"We expect this [%] to increase over the coming years as ore reserves are depleted, forcing companies to adopt more energy-intensive mining methods," Fitch said.

"In an environment where miners will remain committed to keeping costs down, the use of renewables offers significant cost-reduction potential," it said.

  Mining installed renewable energy capacity, by type

Source: Fitch, Energy and Mines

Renewables also offer a reliable source of electricity to mining sites, allowing companies to reduce local political and regulatory risks.

"For instance, Zambia's overdependence on hydropower resulted in a tariff dispute between the government and the country's key copper miners last year that led to power outages and production stoppages at Glencore's Mopani Mines, one of the country's largest," Fitch said.

Following the 2015 Paris Climate Change Pact, mining hubs have implemented measures to progressively reduce emissions, incentivizing mining companies to shift towards renewables.

"For instance, in Chile and Canada, the introduction of carbon pricing schemes, at $5/tonne and $10/tonne, respectively, is pushing miners to increasingly consider ways of limiting their carbon exposure as a core strategic objective and attracting interest in renewables investments," Fitch said.

Electric vehicle and consumer electronics companies will become increasingly valuable customers for mining companies and this will further increase the pressure to reduce environmental impacts, it said.

In one example, Apple and top aluminium producers Rio Tinto and Alcoa recently announced plans to invest in carbon-free aluminium production through Elysis, a new joint-venture. Together with the Canadian and Quebec governments, the companies will invest C$188 million ($142.7 million) in the new business.

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