Western Australia’s mining sector is increasingly looking to renewables not only to meet decarbonisation targets, but to reduce fuel consumption and bring down the cost of powering remote operations.
For businesses operating beyond the grid, however, the transition is not as simple as replacing conventional generation with renewable energy. It requires an integrated approach that considers how generation, storage, controls and electrical infrastructure work together as a complete power system.
Silverstone Chief Commercial Officer Ian Murphy said the company’s established experience in remote power generation provided a strong platform to help clients manage that transition.
At the same time, mining companies were taking an increasingly practical approach to decarbonisation, weighing emissions reductions against cost, reliability and capital requirements.
“The conversation has definitely changed,” Mr Murphy said.
“There’s obviously still a strong focus on emissions and meeting decarbonisation targets, but clients are increasingly asking us about the commercial side as well.
“They want to know: how much diesel can we actually remove? What does that do to our cost of energy? What level of renewable penetration makes sense? What happens to reliability? And what capital do we need to commit to get there?”
That shift is behind Silverstone’s move to establish a dedicated Renewables division, building directly on the company’s existing power generation capabilities across mining and remote operations.
The division will focus on solar photovoltaic systems, battery energy storage systems (BESS) and hybrid power, integrated with conventional generation, controls and electrical infrastructure. Its initial focus will be mining and resources, alongside emerging demand from data centres and other large energy users.
Mr Murphy said the expansion was a natural progression for the business as clients sought to integrate different forms of generation.
“They still need reliable power, that hasn’t changed, but they’re also looking at how they can reduce fuel consumption, bring down emissions and ultimately achieve the lowest cost of energy,” he said.
“Rather than looking at diesel, solar and batteries as completely separate technologies, we see them as different parts of the same energy solution.”
Silverstone can support projects across the full lifecycle, from feasibility, engineering, modelling and system design through to procurement, construction, commissioning, operations and maintenance.
Mr Murphy said hybridisation would play an important role in the transition, particularly at remote mining operations where continuity of power was critical.
Solar could provide energy when the resource was available, while batteries could respond rapidly to fluctuations and short-duration requirements. Conventional generation could continue to provide firm capacity when required.
“The key is not trying to make one technology do everything,” he said.
“When you combine those technologies properly, you can materially reduce fuel consumption without removing the redundancy and reliability the operation needs.”
Battery storage was also becoming more sophisticated, Mr Murphy said, with applications extending beyond storing excess solar generation.
A BESS could provide spinning reserve, respond quickly to changing loads and help optimise the operation of conventional generators.
These capabilities could further strengthen the commercial case for renewables at remote sites, where the true cost of diesel extends beyond the fuel itself.
“If you look at a remote mining operation running predominantly on diesel, there’s a very real cost associated with every litre of fuel that has to be purchased, transported to site, stored and ultimately consumed,” Mr Murphy said.
“If we can use solar and batteries to materially reduce that fuel consumption, there’s obviously an emissions benefit, but there can also be a direct financial benefit to the operation.”
However, several barriers remain for mining businesses looking to increase their use of renewable energy.
Mr Murphy identified access to capital, uncertainty around mine life and technical issues including intermittency, system stability and integration with existing generation among the key considerations.
A renewable asset could have an operating life of more than 25 years, for example, while the remaining life of the mine it serves could be considerably shorter.
Silverstone is seeking to address this challenge by offering a range of commercial structures, including build-own-operate arrangements, power purchase agreements and short-term hire, alongside Construct Only, EPC and other delivery models.
Mr Murphy said this flexibility allowed clients to align the technical solution with their procurement strategy, mine life and capital priorities, including pursuing renewable projects without necessarily committing capital to owning the infrastructure.
Silverstone sees its existing conventional generation capability as a key differentiator for the new division. Its teams already understand the practical requirements of remote power stations, including generators, electrical infrastructure, controls, fuel systems, redundancy, maintenance and operational response.
“When a power station is supporting a mine, reliability isn’t theoretical,” Mr Murphy said.
“If the power goes down, production can go down with it, and the cost of that can be significant.”
He said Silverstone expected hybrid energy systems to become increasingly prevalent across the resources sector as solar, battery storage and smarter controls reduced reliance on fuel.
“I don’t think conventional generation disappears overnight, but I do think the way those power stations are configured will change considerably,” he said.
“What were traditionally standalone diesel power stations will increasingly become integrated hybrid energy systems.”
Silverstone also sees opportunities beyond resources, particularly as Australia’s data centre sector expands and creates demand for large-scale, reliable and increasingly lower-emissions power.
The company believes its combination of generation, solar, storage, controls and long-term operations capability is well aligned with the needs to support the complex energy requirements of these large energy users.
Mr Murphy said the Renewables division would form an important part of Silverstone’s broader growth strategy, while allowing the business to provide clients with a more integrated energy offering.
“Our ambition is not simply to become another renewable contractor,” he said. “We want to be a long-term energy partner to our clients, with the capability to support the full energy solution and structure it in a way that works commercially for each operation.”
“If we can help them lower their cost of energy, reduce fuel consumption and emissions, improve the resilience of their power supply and do all of that without compromising reliability, then we are creating real value.”
By Silverstone
