The world's largest mining companies are ramping up their investments in low- and zero-carbon energy. The confluence of declining costs, improving performance, the intention to address social and environmental issues and a pressing need for reliable, resilient power is fueling the trend.

Navigant Research expects significant growth in the industry sector from this year on out to 2027, with mining companies' investments in and use of digitally networked, low- or zero-emissions energy resources and technologies— solar PV, wind and battery energy storage— nearly tripling over the period. Growth will be fastest in the Asia-Pacific region, which is home to some of the world's largest mining sectors, such as China, India and Australia, according to Navigant's Renewable Energy in the Mining Industry.

The International Energy Agency (IEA) estimates that globally, the mining industry accounts for about 11 percent of total final energy consumption, Navigant points out. "Such intensity makes power generation decisions even more important. While the industry is predominantly powered by traditional fossil fuels, there has been a notable willingness to incorporate renewables, namely solar PV and wind, into mining operations," the report authors state.

Renewable energy growth expected to be fastest among Asia-Pacific's mining economies

Home to four of the world's top five mining economies, Navigant's analysts expects mining companies in Asia-Pacific to lead the way in terms of renewable energy growth across the sector "as countries like China and India try to incorporate renewables at a country level to reach renewable energy targets," they write.

In addition, they expect to see a significant uptick in renewable energy growth among mining companies in Latin America. More specifically, they single out Chile, where the low cost, improved performance and growing policy and institutional support for renewable energy is leading mining companies to increase their investments in and deployment of on-site renewable energy resources, as well as purchase emissions-free energy from third-party power producers making use of solar, wind and battery-based energy storage.

"Despite producing about 10% of the metric tonnage compared to Asia Pacific, Latin America has commissioned 15 renewable projects since 2007—nearly twice as many as any other region," the report authors highlight. "Familiarity with technology and a conducive regulatory environment should continue the growth trend. Navigant Research anticipates the Middle East & Africa region will continue to experience growth as well."

North America is home to a large mining economy, as well, but Navigant's analysts expect that the continent's miners will continue to be slow to integrate renewable energy resources and technologies. "As long as conventional fuels remain relatively inexpensive in this region, renewable adoption will likely be minimal," they write.

Recent news of renewable energy investment by mining companies

Some of the world's miners have announced investments in renewable energy recently. Switzerland's meeco Group, through local joint venture oursun Pacific Ltd., is designing, engineering and installing the 11 MW, hybrid solar PV-diesel microgrid for Canada's Lion One Metals Ltd., owner-operator of the Tuvatu Gold Project on Viti Levu, the largest of the Fijian islands.

Australia's Gold Fields has tapped U.K.-based remote and off-grid power systems specialist Aggreko to build a hybrid, 8-MW, solar-plus-storage microgrid at its mining facility in Granny Smith, Western Australia.

“We are thrilled to reach an agreement with Aggreko for the design, installation and operation of this innovative source of renewable energy, which will generate nearly enough power to run the mine’s processing operations," Gold Fields Executive Vice President, Australasia Stuart Matthews was quoted as saying.

“We expect the renewable power microgrid will be up and running at Granny Smith by Q4 2019 and it will be a welcome addition to our suite of on-site energy solutions across other operations which will enable us to reduce our carbon footprint.”

No "one-size-fits-all" approach

Describing the market for renewable energy in the global mining industry more generally the report authors highlight that: "There is no one-size-fits-all approach to powering mines due to the degree of differences from mine to mine. As mining operators consider power supply options in developing new mines or retrofitting old ones, renewables are gaining traction in the market."

They also point out that mining companies in general have been somewhat slow to invest in and deploy, or otherwise acquire, renewable energy— their analysis identified less than 1 GW of installed capacity globally to date across the sector. They expect that to change, and for a variety of reasons. According to the report:

The costs of renewable technologies, especially wind and solar, are now competing with conventional options even when unsubsidized in certain areas of the world. In countries with subsidies, such as Australia, there have been instances of financial assistance for renewable projects at mines. As relative costs of renewable technology continue to decrease, Navigant Research expects greater integration across the mining industry.

Second, power reliability is crucial to a mine’s success. Securing a reliable supply of power is thus a top priority of mining companies and will drive an interest in greater renewables integration, particularly energy storage.

Lastly, regulatory conditions, environmental awareness, and corporate social responsibility are driving the industry to consider more sustainable options than conventional fuel sources.

"Despite promise, the market for renewable technologies is still nascent. Though deployments have been sporadic, renewables are expected to seize a greater share of generation at mining sites," the report authors conclude.