Image credits: Iberdrola
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News Article

Reduce Operating Costs and Lower Emissions in One Fell Swoop

By Cas Biekmann | Fri, 08/21/2020 - 12:36

For Mexico’s energy-intensive mining industry, it is of vital importance to have access to a stable supply of energy. Disruptions can depress profits or even lead to dangerous situations. The remote nature of mining operations poses an additional challenge because connection to the grid is not always that simple. Rather than facing a challenge, mining companies have the great opportunity to slash costs and increase their profit margins. With tailored energy solutions, Iberdrola now provides clear benefits to any mining operation.

 

ALLURING PROPOSITION

Research by the Columbia Center on Sustainable Investment shows that energy expenses make up 15 percent of a mining company’s total costs. This figure can rise up to 40 percent if the company mines for metals and incorporates processing into their project. However, many of these companies do not manage energy as a part of their portfolio. As a result, they lack visibility on a factor that significantly drives up the costs of their operations. Energy savings alone can be an extremely alluring proposition for mining companies.

Nevertheless, miners are under ever-increasing pressure from investors, governments and consumers alike to clean up their record as well. Examining the industry’s energy statistics, this is no surprise: BloombergNEF shows that mining companies make up 6 percent of global energy demand. This is met through the use of polluting fossil fuels such as fuel oil or coal, resulting in the fact that companies are accountable for a whopping 22 percent of the world’s industrial emissions. By turning to well-thought-out Power Purchasing Agreements (PPAs) offsite or incorporating onsite renewable or gas-based onsite solutions, mining companies can slash heavy operating costs and drastically reduce their emissions. 

 

SOLUTION WITHIN REACH

To make the most out of such an investment, miners could look to companies such as Iberdrola to provide them with solutions. Founded over 170 years ago, the company is one of the biggest energy utilities in the world. Iberdrola is also the biggest private energy generator in Mexico. The company’s installed capacity boasts close to 10,000MW in operation, with another 1,580MW in construction across 13 states in Mexico. Its Mexican energy-base includes combined-cycle centrals, co-generation facilities and wind and solar farms. With this strong foundation, Iberdrola is able to offer competitive electric supply to over 2,500 industrial clients.

One available option is combined cycle power generation. This type of power plant basically uses a gas turbine to generate energy. The large amount of heat being generated is then directed toward a nearby steam turbine via a heat recovery system, which generates even more energy. This process is an incredibly efficient way to produce energy, which makes it a clean form of energy generation as well: The power plants boast certificates that guarantee their environmental efficiency.                                     

Iberdrola has strong expertise in the construction of the combined cycle. In Mexico, the company is planning to construct several new plants, which will total an installed capacity of 1,281MW. This adds to the company’s 11 power plants already in operation, with a total capacity of 8,343MW. By signing PPA’s with Iberdrola’s powerful combined cycle plants, mining companies can benefit greatly from cheap and reliable energy for their operations.

For miners looking to go completely green, Iberdrola has both solar and wind in its portfolio, all constructed on the basis of PPAs with private industry. Under these PPAs, clients can benefit from extremely low energy prices as well as necessary Clean Energy Certificates (CELs). It currently has five wind farms operating in Mexico, and two under construction, totaling 690MW. As for solar, Iberdrola boasts two parks in operation with one under construction, leading to a total of 470MW of capacity.

Other than the PPA, customers might be interested in having their own photovoltaic solar system on their terrain. The benefits are clear: it provides some of the cheapest and cleanest energy imaginable. In addition, a well-maintained solar installation can last for more than 25 years in operation. The downside is the hefty investment companies need to make to acquire the system. Taking away liquidity on such a scale is especially problematic in current times. Furthermore, companies then need to maintain and operate the system, distracting them from their core business. Iberdrola can offer the ideal solution to this problem through its Smart Solar program. With this scheme, mining companies can allocate surfaces or roofs that are not used for their operations. Iberdrola designs, builds and installs the solar system using its own resources. Soon after, it sells the energy generated on the grounds. With this system, companies can benefit from clean energy at a bargain without having to invest a single peso themselves. In this scheme, all the technological and financial risks are taken by Iberdrola, which allows the client to remain focused on its core business.

 

Iberdrola Mexico is dedicated to satisfying the electrical supply needs of its customers. Currently, more than 2,500 companies in different sectors, such as food and beverages, automotive and mining, have placed their trust in the company’s service. These benefit from efficient energy consumption at very competitive rates. These results have been made possible thanks to Iberdrola’s excellent team of commercial managers. Through their work, the management of punctual supply and the flexibility of the company’s energy solutions for each sector and every different company stand out. This sums up Iberdrola’s value proposition: efficient energy at competitive prices goes hand in hand with personalized attention and the ability to adapt to every customer’s needs.

The data used in this article was sourced from:  
Iberdrola, Columbia Center on Sustainable Investment, BloombergNEF
Photo by:   Iberdrola
Cas Biekmann Cas Biekmann Journalist and Industry Analyst