Integrating renewables in mining: Review of business models and policy implications

Galina Alova

No 14, OECD Development Policy Papers from OECD Publishing

Abstract: Mining activities are energy-intensive and rely largely on fossil fuels to meet their energy demands. This exposes the mining sector to potential policy and regulatory risks, stemming from government efforts to shift the global economy to a low-emission development pathway, as envisaged by the Paris Agreement. At the same time, renewables have become an increasingly cost-competitive source of power generation. This has resulted in a business case for the adoption of solar and wind energy solutions in the mining sector, to reduce costs as well as carbon footprint of operations. The sector’s energy transition also presents an opportunity for resource-rich countries, including developing economies, to foster the synergistic development of higher value added domestic activities in the renewable energy sector. The shift of the mining industry to low-carbon energy has the potential to contribute to advancing the climate and sustainable development agenda, while also pursuing economic diversification objectives. However, the integration of new technologies into conventional power systems comes with risks and challenges. This paper aims to enhance the understanding of the key drivers for, and obstacles to, renewable energy integration in mining operations, based on a review of over 30 existing projects worldwide. The analysis identifies a need for an enabling policy environment, encompassing among others a competitive energy market structure and adequate energy infrastructure, to overcome current challenges and support the synergies between the development of the mining and renewable energy sectors.

Keywords: carbon dioxide emissions; energy transition; mining; photovoltaic energy; renewable energy; sustainable development; wind power (search for similar items in EconPapers)
JEL-codes: L72 Q32 Q42 (search for similar items in EconPapers)
Date: 2018-11-27
New Economics Papers: this item is included in nep-ene, nep-env and nep-ppm
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Citations: View citations in EconPapers (2)

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