2.6 Conduct an energy review for new developments and expansion projects

Decisions that are made in the planning and design stage of new mine developments and mine expansion projects have significant implications for energy use across the life of a mine. For this reason, it is important to establish accountability for energy efficiency as early as possible during planning and design. There should also be a very clear plan for the milestones at which specific energy inputs will be considered.

For example, at the concept study and pre-feasibility stage, energy efficiency should be established as an important design consideration. Accountability for energy efficiency should be given to a senior member of the core multidisciplinary engineering team. During the development of feasibility studies and front-end engineering design, technical studies may be commissioned to ensure that optimal energy-efficiency outcomes are considered. For example in-pit crushing and conveying (IPCC) might be compared to a conventional haul-to-surface operation. Energy cost savings should be considered together with the benefits of an increase in the rate of production and the potential for fuel, tyre and labour costs to increase more than other operational costs.

Following construction, commissioning is an essential part of the process. Good commissioning is needed to ensure that design intentions are effectively met.

Box 6 describes the process and outcomes from an assessment of options in the design phase of the Olympic Dam Expansion project.

Box 6: Establishing energy efficiency and greenhouse gas improvement options in the design of the Olympic Dam Expansion

BHP Billiton developed a detailed greenhouse gas management plan for the expansion of South Australia’s Olympic Dam mine, which is the fourth-largest copper deposit and the largest known single deposit of uranium. The plan identified initiatives to reduce emissions from all sources, including scope 1 and scope 2 energy-related emissions.

The company applied modelling using McKinsey & Company’s Australian carbon reduction methodology. This involved a three-step process:

  1. Establish a project baseline.
  2. Identify emissions-reduction opportunities through project workshops and fact-based estimates of the costs and potential abatement volume presented by each opportunity. Make assumptions about factors such as power capacity forecasts, expected learning curves and initial generation costs.
  3. Combine the costs and volumes to form carbon reduction cost curves for the project.

One of the cost curves is shown below. The project baseline (horizontal axis) represents the total carbon emissions if no effort were made to address climate change. The vertical axis represents the cost of carbon reduction. The measures that have a negative cost are the most cost-effective to implement.

An image showing carbon reduction cost curve

Source: BHP Billiton, Olympic Dam expansion: draft environmental impact statement, Appendix L: Greenhouse gas and air quality, BHP Billiton, 2009, http://www.bhpbilliton.com/home/society/regulatory/Documents/odxEisAppendixLGreenhouseGasAndAirQuality.pdf.project-implementation-through-an-energy-efficiency-fund/.

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