Although Mining and Metals Sector is looked as a polluting industry, which releases polluting substances and causes severe damage to the ecosystem, our entire civilized society depends on this sector. Globally this sector uses around 10% of the total energy consumption. Literally, it comes to the total energy consumption of Australia, Mexico, South Korea, Italy and Canada. Unfortunately, still now there is hardly any presence of renewable energy.
Mostly this sector depends on fossil fuels. Naturally, this industry is one among the largest sources of CO2 emissions. Just to have an idea of the amount of pollution it creates: according to global data 2021, “metals and mining industry accounts for approximately 4% to 7% of worldwide greenhouse gas emissions.” The major source of emissions in this industry is from fugitive coal-bed methane, which is released during coal mining.
Naturally, this industry has enormous scope to improve. According to a report by Deloitte, “With renewable energy fast becoming a mainstream energy source, mining companies have a material opportunity to use renewables to lower costs, improve safety, reliability and sustainability, and mitigate risks to ultimately gain a competitive advantage.”
Just a few days back, FICCI with Hero Futures jointly organized an interactive session on ‘Renewable Energy Adoption in Indian Mining and Metals Sector’ to showcase renewable energy solutions and technologies for Indian mining and metals industry and support their transition towards decarbonization and net-zero journey.
Based on the session, in this article, I would like to present what our Indian experts are thinking in this regard, and a bit of the roadshow thereon.
The need of the hour
In Mining and Metals industry several operations like crushing, digging, and processing minerals need supply of energy. Naturally, renewable energy can play a big role there. However, proper planning and financing is required to make it happen.
Drawing attention on that aspect, Pankaj Satija, Co-Chair, FICCI Mining Committee and Managing Director, Tata Steel Mining Ltd., said, “With the series of initiatives taken by the government, the Renewable Energy (RE) capacity in India stands at 179GW as of July 2023.” He further highlighted that the mining & metals industry along with the RE developers are working in a collaborative manner towards the net-zero targets of the industry. He said that innovative sourcing and financing models for RE would support the journey of the metals industry towards decarbonization.
RE installation cost may go down further
Presenting the Renewable Energy Solutions for Indian Mining & Metals Industries R. Sunder, Business Head – India C&I, Hero Future Energies highlighted six energy megatrends that includes SDG & net-zero, RTC (Round the Clock Energy Supply), green molecules, cross border trade, protectionism and energy efficiency.
He added that the renewable energy solutions are now transiting towards firm renewables (with elements like round the clock energy supply, energy storage etc.) and green molecules (comprising green hydrogen, user-producer partnerships etc). Sunder highlighted that the pricing of RE solutions for the industries like mining & metals is expected to further reduce and mature as we see enhanced demand and collaborations.
Supporting natural environment & conducive policies
The geographical position of a place influences the feasibility of harnessing renewable energy. All the regions in India are not having equal potential for hosting renewable energy installations. However, in India, states like Gujarat, Rajasthan, Maharashtra, Tamil Nadu, and Andhra Pradesh have higher solar radiation levels. Coastal regions are also good for wind parks. State’s policy too matters a lot as far as the matter of harnessing RE is concerned.
Highlighting that aspect, Animesh Sharma, Head of Business Development – India C&I, Hero Future Energies pinpointed on the huge potential for RE in the western region with special focus on Maharashtra – as it has abundant wind resources, sunshine, robust grid mechanism and conducive policy frameworks. He further mentioned on the encouraging policies of Maharashtra in terms of ED waiver for 10 years, stamp duty waiver on land for RE projects, single window clearance etc.
Decarbonising the steel industry
Although we may take another two decades (probably after 2040) to ensure cent per cent hydrogen-based steelmaking, at present providing competitive prices by incentivising captive installations or reducing open access RE tariffs will help reduce GHG emissions from steel plants to a great extent.
Representing the Steel Industry, Jatin Parekh, Managing Director, Fortran Steel said that while the decarbonization targets by 2030 may look huge but the industry is taking several initiatives to achieve them.
He mentioned that green hydrogen and solar have moved from buzzwords to become the steel industry future, while the industry is also setting up its RE capacity by collaborating with the RE developers for captive consumption. He mentioned that with increased adoption of RE, the industry is not only reducing its emissions but is also revolutionizing the production processes.
RE’s potential in cement industry
As per a report from Chatam House, “As a key input into concrete, the most widely used construction material in the world, cement is a major contributor to climate change. The chemical and thermal combustion processes involved in the production of cement are a large source of carbon dioxide (CO2) emissions. Each year, more than 4 billion tonnes of cement are produced, accounting for around 8% of global CO2 emissions.” This finding itself describes the huge potential of arresting emission in this industry.
Reflecting the same image, K. N. Rao, Corporate Head – EHS, AFR, Energy Sustainability, MyHome Industries, highlighted that cement is a unique industry as its carbon intensity is largely derived from its raw materials. He mentioned that around 10% of the India’s GHG emissions are from the cement industry and with the increased usage of cement for planned infrastructure development, these emissions could become huge, thus the renewable solutions will play a critical role for the cement industry moving forward.
Rao also stated that with forecasted cement production of 1,400 mt pa by 2050, the year by which the industry looks to become net-zero, there would be a demand for around 50GW of green power from the industry. He suggested that accordingly the policy framework and the approach should be strategized both by the RE industry as well as the cement producers to meet the forecasted demand for renewable solutions in the industry.
Conclusion
As Deloitte’s report rightly points out that “Realising the full benefits from renewables involves more than installing a solar array or wind turbine, it requires a willingness to rethink operational processes and to reconsider the way work is done.” So, strategic policies will accelerate the process of adoption of Renewables in the Mining and Metals Sector.
Apart from emission reduction, deployment of RE in Mining and Metals Sector has some other advantages too. However, at this moment, as Deloitte’s report indicates, “Renewables have reached a position where they should be in the consideration set, at least for new mines. But, in analysing energy options, it is short-sighted to evaluate renewables purely as a cost play; instead, they should be examined as part of a broader social and environmental agenda in addition to their financial proposition as a replacement for traditional fuel sources.”
By P. K. Chatterjee (PK)
