Risks and rewards for the mining sector in the transition to - PowerPoint PPT Presentation

Risks and rewards for the mining sector in the transition to renewable energy Darren Miller 19 June 2019 1

Overview About ARENA Importance of mining sector Quick stocktake on renewable energy costs and momentum Examples of key ARENA projects Short and long term opportunities for mining sector 2

31 March 2019 3

669 PJ 17,500 PJ Mining sector energy production 820 PJ Domestic electricity 21:1 Mining sector energy : Domestic electricity Source: “Australian energy statistics”, Department of the Environment and Energy, 2018. 4

Declining cost of renewables Source: IRENA Renewable Cost Database and Auctions Database. 5

Renewable energy opportunities for the mining sector — 1 — — 2 — Managing operational costs Emerging opportunities for and logistics low-emissions energy, materials and supply chains Onsite and offsite renewable electricity Renewable energy exports, lower Replacements for mobile diesel embodied emissions materials, and Replacement for process heat enhanced local value adding 6

Renewable energy economics for mines are improving Degrussa Gold Fields Port Gregory Initiated: 2014 Initiated: 2019 Initiated: 2019 PV + battery PV + battery + wind PV + battery + wind Grant funding: 53% Grant funding: 12% Grant funding: 27% RE fraction: 20% RE fraction: 50-60% RE fraction: 60% 7 Source: “An Introduction to ARENA’s Remote and Regional Projects”, ARENA 2017

Managing stationary energy costs with PPAs ARENA has funded the Business Renewables Centre which assists companies with corporate power purchase agreements (PPAs). 2018 was a peak year for corporate PPAs with over 1.8 GW of solar and wind contracted. All of this is grid connected. 8

Battery electric for transport 85% cost reduction since 2010. 18% learning rate. 9

Hydrogen electric for transport Source: National Hydrogen Roadmap. CSIRO, 2018. 10

Global push for renewable energy and low- emission materials Apple is committed to advancing technologies that are good for the planet and help protect it for generations to come. Apple CEO, Tim Cook ... the customers of our customers want to have full traceability on their products, and they want to make sure they have a carbon- friendly product. Rio Tinto CEO, Jean-Sebastien Jacques 11

Energy-intensive value-adding opportunities 12 Source: “The hydrogen opportunity for Australia”, McKinsey & Company, presentation to Australian Energy Week, 2019.

Conclusion ● The mining industry is important to Australia’s future wealth and the global transition to renewables presents both risks and rewards. ● Mining companies are acting now to manage operational costs and respond to emerging supply chain sustainability requirements. ● The potential for the resources and mining sector to embed and export renewable energy is immense and could help usher in new export markets. 13

Thank you Darren Miller Chief Executive Officer e: darren.miller@arena.gov.au 14