"Mining will continue to require significant amounts of energy, but if this can be supplied through greener sources, the industry will be able to change the perception some people have of it."
ENGIE Energía Perú recently announced it will build a wind farm to supply power to Quellaveco, making it the first Peruvian mine to use 100% renewable energy. Can you provide details of this agreement?
The agreement between ENGIE and Anglo American will mean that the entire energy supply of the Quellaveco project, which is approximately 187 MW, will be 100% green energy. This power project will make Quellaveco the first mine in Peru which secures 100% of its electricity needs through renewable sources from the beginning of the mine operation.
In order to be able to produce the green energy that the mine will require, we will be building a 260 MW wind farm in south-central Peru. We will also build a 60 km transmission line to connect the wind farm to the national grid. The concession on the Punta Lomitas wind project has already been granted and we expect to start plant construction in the second half of 2021. Siemens Gamesa will be providing the wind turbines for the project and is a key partner for ENGIE in this investment.
What are the environmental and cost benefits of installing renewable energy, such as wind turbines?
The Punta Lomitas wind project is a game changer for ENGIE. Looking at the 2,500 MW installed capacity we have in Peru, which represents approximately 20% approximately of the installed capacity in the country, around 300 MW is currently from renewable sources. Therefore, with the 260 MW wind farm project we are almost doubling our renewable energy source capacity.
In 2017, we decommissioned our diesel fuel plant in Ilo, which was the first plant we bought when we started operations in Peru. Taking this plant out of the system reduced our CO2 emissions by 1 million tonnes per year (mt/y). In 2018, we inaugurated our first 40 MW solar plant, which avoids 52,000 mt/y of CO2 emissions. By the end of 2022, we will decommission our 135 MW coal plant, the only one in Peru, which will reduce CO2 emissions by 850,000 mt/y. The Punta Lomitas wind project will avoid CO2 emissions by 230,000 mt/y. To summarize, in a very short period of time, we are eliminating approximately 2 million tons of CO2 emissions per year, while at the same time avoiding 300,000 mt/y of CO2 emissions through generating energy from renewable sources.
As well as being environmentally friendly, there is also a positive financial impact. The south of Peru and north of Chile have abundant solar resources, but Peru also has a couple of wind sites which are world class. When we develop renewable energy plants, we are able to do so without any subsidiaries or auctions from the government. It is great news for future development if you can be environmentally-friendly but also competitive from a cost perspective.
Are power projects such as Punta Lomitas just applicable for multi-billion dollar operations such as Quellaveco, or can they be scaled down for small and medium-sized mines as well?
The beauty of renewable energy projects is that they are flexible and can be scaled to fit the size of the operation. Renewable energy plants are much more modular than fossil fuel plants, as increasing capacity can be done through just adding another solar unit or wind turbine. ENGIE Energía Peru has approximately 1,000 MW renewable energy projects in its pipeline, and this is the company’s focus for the foreseeable future in Peru.
To what extent do you think the utilization of green energy could help the mining industry improve its image?
Because of the nature of mining activities, the industry consumes a significant amount of energy in various forms. In recent years, there has been a shift towards more sustainable forms of energy consumption, with Quellaveco leading the way for the rest of industry to follow. Mining will continue to require significant amounts of energy, but if this can be supplied through greener sources, the industry will be able to change the perception some people connect with it. Mining is a necessity, and if it can be done in a sustainable way, it is a win for the communities, the companies that need a license to operate, the environment, and the Peruvian economy.