MINING POWER
projects varies from customer to customer but
typically ranges from three months to three
years; contract extensions are common. A
unique factor of these projects is the fast
deployment and time to on-line generation.”
Generally a short-term distributed generation
project has similar terms and conditions as a
long-term power purchase agreement. There is
normally a capacity charge in terms of $/MW
per month and an energy charge in terms of
$/kWhr of power generation. Depending on the
scope of the project, there will be additional
charges for mobilisation, installation and
commissioning.
He adds: “These short-term distributed
generation projects have several advantages for
utility customers. First of all is the speed of
deployment and time to on-line generation. The
industry has grown rapidly in terms of mobile
fleet availability, and utility customers have
come to depend upon rapid deployment,
especially in emergency situations. Typically a
50 to 100 MW project is delivered in 120 to 180
days. But some recent projects have delivered
120 to 130 MW within 40 days.”
Another advantage is the risk mitigation
offered by these projects. Utility companies
have much less long-term risk to their system
with these short-term projects. Other key
advantages are site flexibility and interconnect
voltage flexibility. An added advantage for
utilities is the savings in capital expenditure.
With no CAPEX requirements, it is easier for a
utility to reach a decision on adding capacity.
Why are these grid problems occurring?
Manint comments: “Globally the investment in
electric power infrastructure has not kept pace
with the rapidly growing demand for electrical
consumption. Rapid economic growth,
industrialisation and increasing populations
directly increase the demand for electrical
power. Since 2002, emerging economies, with
the exception of China, have struggled to build
additional electrical capacity at a fast enough
pace to match the rapidly growing demand. The
shortfall of investment in power plants is clear,
but an additional factor is the slower investment
in electrical distribution networks. High-voltage
distribution systems take years to develop,
permit and construct.”
IM also spoke to Julian Ford, Chief
Commercial Officer at Altaaqa Global Caterpillar
Rental Power on the continuing role of power
management in the current downturn. “The
present times have not been favorable to the
mining industry. Many mine operators in Africa,
Asia and South America have been facing
myriad production-related challenges, owing to
power shortages, not helped by the longer and
stronger than expected El Niño phenomenon. El
Niño, the cyclical meteorological phenomenon,
24 International Mining | SEPTEMBER 2015
brings extreme weather to parts of South
America, Southeast Asia, Australia and Africa.
For instance, a major nickel and copper producer
in Indonesia has been facing consistent output
drops as hydroelectric power facilities fail to
generate enough electricity. In Peru and Chile,
persistent heavy rains not only cause extreme
flooding into zinc mines, affecting their
production and triggering price spikes, but
widespread blackouts and damage to power
infrastructure.”
Then, there is the gradual decline of prices of
commodities for the past several years. Prices of
gold, silver, iron ore, coal and copper have all
been negatively affected by stringent credit
restrictions, weak global demand and a growing
supply from new low-cost projects. As a result,
mining companies, established and start-ups
alike, are struggling to maintain a profitable
production, resulting in job cuts and tighter cash
flows and limited expenditures.
Ford comments: “In such a case, mine
operators can find huge benefits in hiring the
services of temporary power providers.
Electricity plays an undeniably essential role in
mining operations, be it in exploration,
production, climate control or workplace
visibility, and rental power plants can provide
the necessary electricity without the operators
spending scarce CAPEX. As opposed to investing
in permanent power infrastructure, mining
companies can pay for the electricity produced
by hired power plants from their operating
revenues. As their operations expand and their
power requirements increase, mine operators
will be able to add additional power modules
that will increase the rental power plant’s
generation capacity. The investment in
temporary power plants have been proven to be
marginal compared to the cost of foregone
opportunities, lost production time, or wasted
man-hours.”
As rental generators are modular and
containerised, they can be rapidly delivered to
and installed anywhere in the world, and can be
tailored to the requirement of any mining site.
They are fully able to function even in remote
locations and in sites where traditional power
infrastructure, like grids and substations, is
outdated, damaged or absent. They can be fully
constructed and powered on in a matter of days,
and can be ramped up or scaled down
depending on a site’s power usage demand.
“Modern rental generators boast of a cleaner
operation, being able to run on a variety of
fuels, including natural gas or dual-fuel (70%
gas and 30% diesel). As a case in point,
Caterpillar’s natural gas-powered generators
surpass the NOx emission requirements,
emitting only 250 mg/Nm3 even without
aftertreatment. Caterpillar’s gas generators are
also capable of converting coal mine methane to
electric or thermal power, which contributes to
the reduction of greenhouse gas emissions. The
gas generator technologies have the ability to
utilise gas with variable concentrations of
methane.”
The global mining industry is going through
challenging times triggered by natural and
economic circumstances. Temporary power
technologies can give mine operators a
sustainable competitive advantage, as they can
enhance a site’s productivity and optimize its
processes without the need for a sizeable
capital expenditure.
Caterpillar and its unique GPP
network
Caterpillar as it does in the mining equipment
space has a unique solution to temporary and
bridging power in that it works through five
providers of Global Power Providers (GPP) to
offer solutions to mines around the world. In
some cases more than one might compete in a
particular country or project but all are
Caterpillar recognised and recommended
companies offering certified Cat solutions – they
operate part of their businesses in a similar way
to Caterpillar’s dealer network for equipment
but are all power specialists and all work with
mining operations. Some of them work
exclusively with Caterpillar and Cat dealers and
others work with other OEMs and generators as
well. In this power segment Caterpillar uses the
Cat Rental Power corporate brand. However, it is
not the case that all power solutions from Cat go
through these five GPP agreements; other Cat
dealers in certain areas may also provide power
options where they have the expertise to do so.
The first of these five is Energyst, a
Netherlands-based power rental company jointly
owned by European Caterpillar dealers. It was
created when ten European Cat dealers merged
their power rental businesses and while initially
it had most of its depots in Europe, it branched
out to Chile and Argentina and beyond. In 2013,
Caterpillar entered into an GPP agreement with
Zahid Group, which had recently formed a new
subsidiary company, Altaaqa Global. As an GPP
partner, Altaaqa Global provides multi-megawatt
temporary power solutions both within its
original home market of Saudi Arabia and
globally through its Dubai office.
Jacksonville, Florida, headquartered APR
Energy is a global leader in large-scale, fasttrack power solutions. It signed an agreement
with Caterpillar and Cat dealer, Ring Power, in
2011 “to partner globally in pursuing temporary
power solutions for the growing international
power projects market.” APR said at the time:
“This agreement builds upon APR’s existing
relationship with Caterpillar established over a