Understanding and Managing Risk in Power Production: A Roadmap to Significant Cost Savings
17 November, 2016 | White paper
Power production is a necessary but challenging operation for off-grid mining operations. Power is critical for the mining, processing activities and essential services to mine personnel and, when it fails, it has a direct impact on production and related revenues. Therefore, as a precaution, these power plants are often managed very conservatively. This behavior not only hampers the overall efficiency of the power production, it also greatly increases operational costs, often to millions of dollars per year; not to mention the additional fuel management requirements related to shipping, storing and handling the fuel. This paper explores the fine balance between mitigating the risks of power production losses and operating an efficient power plant. The goal is to educate off-grid mining companies on how to make informed decisions that recognize the level of risk that can be tolerated and how to seek optimal profits during power production.
We address the topic by discussing two main subjects that will help to understand and manage risk better in order to make informed decisions that will minimize fuel and maintenance costs. In the first part of this paper, we explore how to categorize and understand the risks of experiencing power loss relative to the three main pillars of an energy network: production, distribution and usage. In production, we discuss the typical causes and probabilities of genset failures and their impact on the network. In distribution, we pinpoint key electrical issues often experienced in off-grid networks. We then go over the usual suspects (electrical users) that pose the highest risks to network stability and how they can affect the system. In the second part of this paper, we discuss how to address and optimize the operation according to the risks and rewards by using Agnico Eagle’s Meadowbank mine as a case study. Here, this paper illustrates the savings potential of implementing technical solutions.
Note that this white paper was the subject of a presentation at the Risk and Resilience 2016 conference in Vancouver, Canada.
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