Mining is an industry where green hydrogen has enormous potential. At the recent “Hydrogen and Mines” conference Enel Green Hydrogen’s Lorenzo Ducci presented a vision of a future in which economies of scale and partnerships will be key.
For the mining industry, setting high carbon reduction targets is becoming the norm, and that is why it is showing great interest in green hydrogen. This is part of its quest for decarbonization alternatives. The company Energy & Mines organizes a series of events with a view to understanding and discussing the best solutions for decarbonizing the mining industry. In this context, on September 8th and 9th it held a virtual summit on the role of green hydrogen in decarbonizing the sector. For EGP, which is a global leader in the renewable energy sector, it was a welcome opportunity to set out our vision for the future.
Lorenzo Ducci, our Hydrogen Senior Commercial Officer, spoke on behalf of EGP. He argued that mines need to have a holistic vision when it comes to the question of decarbonization: in other words, one that combines electrification, energy efficiency,batteries and green hydrogen in order to make the best use of their synergies.
Electrification is, of course, the cheapest and easiest way to decarbonize much of final energy consumption, but not all processes can be decarbonized in this way, and this is where Enel Green Power sees the potential of green hydrogen.
In the mining sector, the most promising prospects for hydrogen relate primarily to processing or its use as a fuel for the big mining trucks. Hydrogen can also be used as a feedstock to produce green minerals, such as steel. Ducci believes this would enable companies that today only export minerals to expand their activities.
“Hydrogen can be used for its chemical properties to produce green minerals such as steel. This would allow miners that currently export ore to become more vertically integrated, positively expanding their business model.”
Lorenzo Ducci, Hydrogen Senior Commercial Officer, EGP
The preferred business model
Enel Green Power generally offers two types of hydrogen solution. The first is a collocated, behind-the-meter option, whereby the electrolyzer is installed next to one of Enel’s renewable plants, so they are directly connected, thereby avoiding grid charges. The second is a standalone solution where the electrolyzer is built at the grid-connected offtaker’s premises. This reduces the cost of hydrogen transportation, but can result in high grid electricity costs. According to Ducci, “The trade-off is between transport costs and grid charges.”
However, for mines with enough land availability, the company is thinking about a hybrid solution: building the renewable plant and the electrolyzer together at the offtaker’s site. In this case, the electrolyzer would not be connected to the grid, but to an offgrid renewable plant. And because both would be located at the mine, there would be very little in the way of transportation costs.
Economies of scale
Electrolyzers also feature in one of the main issues regarding green hydrogen in general: its cost, which is not yet competitive. Indeed, electrolyzer prices are now the real game changer in this respect. Ducci said: “There is a lot of talk about adding gigawatt hydrogen capacity, but today there’s less than 200 MW of electrolyzer capacity worldwide. So, the point is to work with electrolyzer manufacturers to enable them to take advantage of economies of scale. To scale up the technology, we need to start having projects.”
The renewable energy sector also needs to develop partnerships with mining companies, and this could help create a new business model. Ducci added: “We don’t want to consider the miners as simple buyers of hydrogen, because they need to invest in this technology as well. We want to work together, create this partnership within which to build solutions and develop applications.”
Ducci’s advice to miners at the start of their decarbonization journey is to find the right partner, study the portfolio of available solutions, and create a pilot project in order to understand how all the different elements, including renewables, batteries and hydrogen, work together. “You need to think of the mine as an ecosystem, and show the will to transform it into a green mine,” he concluded.
Source: Enel Green Hydrogen
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