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Mining Power Issues

Ontario is playing politics with power – again – by Margaret Wente (Globe and Mail – November 3, 2015)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Do you understand your electricity bill? Me neither. All I know is that it keeps going up. There was a rate increase in May, and Ontarians got another one this week.

The provincial government made it sound like nothing. An increase of only 3.4 per cent, on average. Four bucks and change a month! A latte at Starbucks costs more. But this isn’t the truth, of course. The truth is that residential electricity rates have gone up a whopping 12.6 per cent since last winter, says Tom Adams, an independent energy consultant who is an expert on energy politics in Ontario.

The average Ontario household is paying about a third more for power than in 2010. On Jan. 1, bills will go up again when the government cancels the 10-per-cent rebate that it cheerily calls the “clean energy benefit.” There will also be a new tax to subsidize low-income users. Suck it up, people. There is no end in sight.

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Why privatizing Hydro One is proving politically costly – by Martin Regg Cohn (Toronto Star – November 1, 2015)

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

Hydro One sell-off not a risk not worth taking — mostly because of the public policy peril, not financial risk.

As Hydro One is slowly sold off, it won’t be so much missed as misunderstood. And misrepresented.

Misunderstood, because most people living in the Greater Toronto Area have never dealt directly with Hydro One and might reasonably wonder what, if anything, its sale has to do with rising electricity bills. (Answers below.)

Misrepresented, because a political fight over the sell-off of this provincially owned utility is obscured by predictable government contortions and opposition distortions. (Miscalculations below.)

Hydro One is back in the news thanks to the foresight of Ontario’s New Democrats.

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Drought-Caused Blackouts Batter Zambia, Zimbabwe Economies – by Associated Press (NBC News – October 31, 2015)

http://www.nbcnews.com/

HARARE, Zimbabwe — With the rains not having fallen as they normally do, water levels have dropped in a dam that supplies electricity to Zambia and Zimbabwe, causing power blackouts, business closures and consternation. Some traditional chiefs are blaming an angry river god.

Zimbabwean media, citing the chiefs, said the low water levels at Kariba Dam, built in 1960 on the border between the two countries, could be due to failure to conduct traditional rites. The flow of the Zambezi River, which feeds the dam, has also dropped, depleting the famed Victoria Falls of its majestic power.

The Kariba power station is a major provider of electricity to the neighboring nations. Traditional leaders on both sides of Kariba Lake, which is formed by Kariba Dam and is the world’s largest man-made lake by volume, have conducted rain-making ceremonies to try to stem further decline of water levels. They plan to appeal for rain in another ceremony on Saturday.

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Hydro One sale could cost Ontario $500-million a year in lost revenues: budget watchdog – by Ashley Csanady (National Post – October 29, 2015)

The National Post is Canada’s second largest national paper.

The Ontario Liberals’ plans to sell Hydro One could cost the treasury $500-million annually and will eventually increase the province’s net debt, the financial accountability officer has found.

Stephen LeClair’s inaugural report slams the Liberal government’s plans to sell 60 per cent of the utility — which transmits most electricity in the province — as a short-sighted cash grab that will cost more than it makes in the long run.

The report notes that, in the short term, the sell-off will make it easier for Ontario to balance its budget by its planned deadline of 2017/18, but the lost revenues will hurt the bottom line over the longer term and make it harder to balance future budgets. The plan is to sell a 15 per cent stake in the Crown corporation each year until 2019, when the province’s stake will be reduced to 40 per cent.

“Once the full 60 per cent has been sold, the province would experience an ongoing negative impact on budget balance from foregone net income and payments-in-lieu of taxes from Hydro One,” the report notes, putting that number at $100 million annually.

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Despite barriers to adoption, cost pressure driving renewed mining interest in renewable energy – by Henry Lazenby (MiningWeekly.com – October 22, 2015)

http://www.miningweekly.com/page/americas-home

TORONTO (miningweekly.com) – Mine operators are in the current subdued economic reality increasingly looking at renewable electricity sources as a way to reduce current and future costs at operations; however, lower commodity prices hinder the widespread adoption of renewables, as falling profits and lower fuel prices maintain certain barriers.

This had resulted in miners shifting their primary motivation for implementing renewable projects to being a financial solution to drive down costs and improve productivity. Previous “softer” motivations involved the improvement of a project’s environmental footprint or satisfying social responsibility commitments, AngloGold Ashanti global VP of energy management and electrical asset integrity Bill Allemon told an audience during the third annual Energy and Mines summit, in which Mining Weekly Online participated.

Speaking during a panel discussion examining energy priorities, timelines and new technologies, he noted that while the company’s activities were mainly focused on the African tropical belt, where hydropower generation was impacted by ten-year drought cycles, the company had highlighted that each cycle was getting worse and more punctuated.

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Miners can exploit opportunities in alternative energy – by Prinesha Naidoo MoneyWeb.com – October 16, 2015)

http://www.moneyweb.co.za/

And learn from past failures.

JOHANNESBURG – South Africa’s mining directors did not act fast enough in response to the country’s energy challenges. That’s according to Thomas Garner, CEO of Cennergi, an independent power producer.

Participating in a panel discussion about the energy crisis and changing energy mix at the Joburg Indaba, Garner said the stability of the country’s electricity supply had been flagged as a risk since the mid-2000s: “We predicted that electricity prices would treble and no one believed us”.

At that stage, electricity was never listed as a massive risk or even one of the top five risks to industrialisation in South Africa due to Eskom’s reliability and the fact that it was cheap to buy electricity from the utility, he said. And this, according to him, raises questions as to how directors with fiduciary responsibilities make decisions.

But fellow panelist and energy thought leader Mike Rossouw said the fact that “nobody knows what energy demand is going to be in the future” has profound implications for investing in growth.

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Manitoba-Nunavut hydro link is economically viable: study – by Sarah Rogers (Nunatsiaq News – October 6, 2015)

http://www.nunatsiaqonline.ca/

Report calls for next study on $904-million electrical power network

A new study commissioned by the Kivalliq Inuit Association says a project connecting Nunavut’s Kivalliq region to Manitoba’s electrical power grid is economically viable, environmentally beneficial, and should move forward without delay.

The estimated cost of the project, which would extend transmission lines north from Churchill, Man. up the western Hudson Bay coast, is about $904 million, says the new scoping study, prepared for the KIA by engineering firm BBA Inc. and released last month.

But the study suggests the project would pay for itself over its estimated 40-year lifetime, delivering projected savings of $40 million a year by replacing fossil fuels from dirty, expensive diesel generators with cleaner hydroelectric power.

The report, called Hydroelectric Power from Manitoba to the Kivalliq region of Nunavut, says extending the electric power grid “would generation great socioeconomic and environmental benefits for the population of the Kivalliq region and the development of the mineral industry.”

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Is it the end of coal? – by Tracy Johnson (CBC News Business – September 17, 2015)

http://www.cbc.ca/news/business/

The coal industry meets in Vancouver today to talk survival in the midst of a deep downturn

At a glance, the Canadian Coal Conference kicking off in Vancouver today looks like any other corporate confab: A golf tournament, a hotel ballroom and a reception at an uptown restaurant are all on the agenda.

However, amid the pleasant trappings Canada’s coal industry will spend the next few days contemplating a frightening present that’s pointing toward an even more uncertain future.

Coal is facing a laundry list of challenges: reduced demand in Asia, prices at decade lows and environmental pressure in North America to stop burning the fossil fuel.

Max Wang is the chief executive of Grande Cache Coal. His company made headlines a year ago when it was sold for just $2 to Up Energy Group, based in China. Wang says that without that new ownership he’s not sure Grande Cache would have survived.

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INTERVIEW-Zambia to triple power generation in two years with solar – by Stella Mapenzauswa and Chris Mfula (Reuters India – September 16, 2015)

http://in.reuters.com/

LUSAKA, Sept 16 (Reuters) – Zambia expects to triple power output to 6,000 megawatts (MW) in 2 years through expansion of solar energy by foreign investors, the head of its investment agency said.

Erratic electricity supplies have hit mining in the continent’s second biggest copper producer, where the bulk of its generation capacity of 2,200 MW of power is water-powered.

The power problems and copper price slide have driven the kwacha currency to record lows amid a selloff in commodity-linked currencies as top copper consumer China’s economy has slowed.

Zambia Development Agency (ZDA) Director General Patrick Chisanga said he had held “very positive” talks with an unnamed German company aiming to invest $500 million in a solar power plant but did not disclose its planned location.

“It is planned that they could produce about 400 megawatts of power in two steps,” Chisanga told Reuters.

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OPG partners with First Nation for $300M project – by Alan S. Hale (Timmins Daily Press – August 28, 2015)

The Daily Press is the city of Timmins broadsheet newspaper.

SMOOTH ROCK FALLS – Nearly 30 years of work by the members of the Taykwa Tagamou First Nation culminated in a ceremony held along the bank on the New Post Creek north of Smooth Rock Falls on Thursday morning.

The location is the future site of the Peter Sutherland Sr. Generating Station, which is a joint project between Ontario Power Generation (OPG) and a band-owned company, Coral Rapids Power. Although construction began on the $300 million hydroelectric dam months ago, the official announcement of the project was an emotional one for the First Nation members; some of whom have worked for decades to make it a reality.

“It took a big team to put this together. We had to push hard for it, and sometimes it nearly went off the rails. But we had a dream, and it is now a reality,” said band councillor and former chief Peter Archibald, who has worked on the project since 1979. “When this started, I had long hair that was black. Look at me now — falling out and white!”

Once completed, the new dam will produce 28 megawatts of power; enough to power 1,000 to 2,000 homes. The construction of the dam is expected to create 220 construction jobs.

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NEWS RELEASE: Wataynikaneyap Power Signs Partnership Agreement with FortisOntario and RES Canada

www.wataypower.ca

(August 27, 2015 – Thunder Bay) Wataynikaneyap Power achieved a new milestone today by signing a Partnership Agreement with FortisOntario Inc., and Renewable Energy Systems Canada Inc. (“Fortis-RES Partnership”) to expand grid connection to sixteen (16) remote First Nation communities in Northwestern Ontario.

“Our people’s vision is to own, control and benefit from major infrastructure development in our homelands. Through this partnership, we are changing the landscape of how First Nations can do business into the future,” says Margaret Kenequanash, Chair of Wataynikaneyap Power. “Together we have reached a major milestone towards getting our communities off diesel generation, and improving the socio-economic situation for everyone’s benefit.”

Wataynikaneyap Power, owned by 20 First Nation communities, holds a majority interest in the project, which is mandated and supported by community leadership.

The Hon. Bob Chiarelli, Minister of Energy, will attend today’s press conference along with several other key provincial dignitaries. “We acknowledge the ongoing commitment from the Province of Ontario to connect remote First Nations to the provincial grid, and thank Minister Chiarelli and his colleagues for their continued strong support,” says Kenequanash.

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Sun-Drenched Miners Look to the Skies to Cut Fuel Costs in Half – by David Stringer and Paul Allen (Bloomberg News – August 26, 2015)

http://www.bloomberg.com/

The DeGrussa copper and gold mine in Australia’s sun-scorched outback is getting a solar farm, the latest example of the industry embracing clean energy.

The plant will replace about 5 million liters (1.3 million gallons) of diesel a year, a fifth of the mine’s energy needs. Energy generated by the system may eventually cost about half that of diesel-generated power, according to Sandfire Resources NL, the deposit’s owner.

Miners including Rio Tinto Group are installing new solar plants from Chile to South Africa, betting they’ll deliver long-term savings even as tumbling oil prices cut power costs. The global solar-power market for mining companies may grow to about $2 billion a year by 2022 from about $42 million in 2013, according to Navigant Consulting Inc.

“Solar-power providers are specifically targeting mines right now and it’s about replacing diesel,” Dexter Gauntlett, a senior research analyst at Navigant said by phone from Portland, Oregon. With lower costs, “it becomes a no-brainer,” he said.

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Why Ontario should look west, not east, for hydro power – by Wil Tishinski (Globe and Mail – August 20, 2015)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Will Tishinski is former vice-president of power supply planning (retired) for Manitoba Hydro.

It was recently reported that Ontario is looking to buy power from Newfoundland and Labrador. This is the wrong direction. Ontario should be looking westward to Manitoba, which is more accessible.

Manitoba currently receives 75 per cent of its electricity requirements from the Nelson River, which has an ultimate capacity of 6,000 megawatts. Only half of that potential is developed today. To meet its own needs, Manitoba will build the generating sites incrementally, with the last plant being constructed perhaps 50 years down the road.

It makes more sense to develop the unharnessed 3,000 MW now and to share at least half that with Ontario. The entire block of power could be transmitted by direct-current transmission to a converter station near Dryden, Ont.

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Ontario’s Power Trip: How Hydro is walloping Ontario business – by Parker Gallant (National Post – August 19, 2015)

The National Post is Canada’s second largest national paper.

Over the past several months there has been a constant din of noise from all business segments in Ontario about the high price of electricity and its effects. Electricity prices have risen as they have absorbed the high costs of 20-year contracts for renewable energy in the form of wind and solar as additions to Ontario’s electricity grid. Ontario currently has a huge surplus which results in as much as 20 per cent of our generation exported at fire sale prices.

Couple that with a drop in demand, annual spending of $400 million on conservation messages, smart meters that allow time of use (TOU) pricing and the Hydro One, OPG and other Ministry of Energy employees enjoying wages and benefits that outstrip the private sector means electricity bills for all segments of businesses and households are now a drain on the economy versus an attraction for new business and the jobs they might create.

The foregoing recently manifested itself in a report from the Ontario Chamber of Commerce entitled: “Empowering Ontario: Constraining Costs and Staying Competitive in the Electricity Market.” The report stated soaring electricity prices would cause one (1) in 20 Ontario businesses to shut their doors within the next 5 years.

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World’s Biggest Dam Needs Rain to Send Power to Zambia Mines – by Matthew Hill (Bloomberg News – August 14, 2015)

http://www.bloomberg.com/

Energy-use curbs by Zambia will keep its largest electricity plant at the world’s biggest dam, Lake Kariba, going until November, when seasonal rains may begin replenishing water levels at the hydropower station.

“If we don’t do anything right now, by October we’ll have nothing,” Jackson Sikamo, president at the Chamber of Mines, which represents mining companies in Africa’s second-biggest copper producer, said by phone Thursday. “If we do something right now, we’ll be able to run up to November and then the rains will come and we’ll be able to continue to operate at reduced levels.”

The Kariba North Bank generation facility has capacity to provide as much as 1,080 megawatts, nearly half of Zambia’s normal power production. Water levels at the reservoir had dropped to 40 percent by July 19, according to the Zambezi River Authority, half of where they were 12 months earlier. Neighboring Zimbabwe also relies on the dam for electricity.

Zambia in June started cutting power to customers other than mines by as much as 10 hours a day because of reduced generation at Kariba and the Kafue Gorge plants.

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