Aussie Miners Turn to Solar Tower Power from Diesel

Australian mining firms, hit by high fuel costs and falling commodity prices, could soon swap their diesel generators for 24-hour, solar-power systems, the head of a private renewable power firm said on Thursday.

Mining firms are also worried about an emissions trading scheme set to begin in Australia in 2010, Steve Hollis, CEO of Sydney-based Lloyd Energy Storage, told Reuters in an interview.

The emissions scheme will target the top 1,000 polluters and mining firms. Many of the latter, which operate in remote areas and rely on their own power systems, are aiming to cut their carbon emissions to meet an expected industry-wide cap and fear a resulting loss of competitiveness.

Falling commodity markets, spooked by the spectre of a protracted global recession, have forced some of Australia's largest miners to scale back their production plans, reducing their appetite for diesel.

"The situation faced by miners in Australia is that diesel generation is already an extremely expensive component of their operating costs. They see diesel prices just ever increasing.

"Coupled with a carbon tax on top that, they can see the costs of their energy burgeoning to some extent out of control," he said.

Lloyd has developed an on-demand solar system in which a series of mirrors focus the sun's rays on a graphite block at the top of a tower at the centre of the array. The sun's energy heats up the block through which water passes, creating steam that drives conventional turbines.

The system works day and night because the graphite blocks retain their heat for many hours.

The company has already begun building a 3MW project to power two towns in western New South Wales state and plans to commence a 10MW project in western Queensland in 2009. Hollis said six mining firms had approached his company over the past nine months and agreements for projects ranging from 8MW to 50MW were at various stages of discussion, including memorandums of understanding and feasibility studies.

He declined to name the mining firms but said it was costing up to 70 Australian cents per kilowatt/hour for diesel-powered electricity, and rising.

"We can lock in at a reasonably fixed price for a long period - 10 to 15 years - at less than half that. So that's what's got their attention," he said.

He said an 8MW plant would cost about A$70m and cover about 20 hectares (50 acres) but added that operating costs after construction would be minimal.

There has also been strong overseas interest in the solar-tower systems, including the United States and Europe.

By David Fogarty, Climate Change Correspondent, Asia, Reuters.