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Who Digs Solar and Wind Power? That’s Right: Miners

Mines from the Americas to Africa and Australia are slowly becoming unlikely hotspots for the production and use of green energy.

In some places, wind and solar farms resurface revenue from deserted mine lands. Elsewhere, mining companies are powering a portion of ongoing operations with renewable energy, which is now cost competitive with traditional fossil fuels and gives a green sheen to an industry often maligned by environmentalists.

To be sure, these are early days for these strange bedfellows. The reason for the coupling of mines and green energy varies from site to site and country to country, according to experts, but the trend is global and growing.

In the United States, the federal government views abandoned mines such as depleted coal fields in Wyoming and a shuttered copper pit in Arizona as ideal locations to site renewable energy projects because they spur the cleanup of contaminated lands, create jobs, and alleviate development pressure from renewables on existing farmland and pristine landscapes.

Alternative energy going mainstream

Elsewhere around the world, mining companies are turning to renewables to complement diesel-fueled generators that power off-grid operations or as an alternative source of supply to break the pricing stranglehold of traditional energy companies.

Cleaning Contaminated Lands

Among the early forays into the space of renewable energy on abandoned mine lands is a $500 million, 237-megawatt wind power project built by PacifiCorp between 2008 and 2009 on a depleted surface coal mine in Wyoming that supplied a nearby power plant from 1958 to 2000.

The site, which had been the subject of reclamation work since 1999, fit with PacifiCorp's desire and regulatory need "to build renewable resources for our customers," Mark Tallman, the company's vice president for renewable resources, told NBC News.

In Arizona, a 5 megawatt solar photovoltaic project was completed in 2011 on 38 acres adjacent to the pit at Freeport-McMorRan's Ajo Copper Mine, which ceased operations in 1983. The project was developed on land leased from the mining company and the electricity from the Duke Energy Renewables facility is sold to Arizona Public Service, a utility, under a 25-year power purchase agreement.

The Arizona project is relatively small in terms of utility-scale solar, but typical for solar systems sited on contaminated and disturbed lands, said Jordan Macknick, an analyst with the energy forecasting and modeling group at the National Renewable Energy Laboratory in Golden, Colo. "That just reflects the caution that developers are taking" as they test the market for these projects, he said.

A chief concern is liability, he said. Solar projects often involve heavy machinery to dig up soil and flatten the areas where the solar panels are placed, for example, which can stir up buried and capped pollutants that could contaminate workers and nearby residents. If that happens, who pays for the damages?

Tech giant goes green with renewable energy 2:33

But as the renewable industry shows it can install solar systems with minimal disruption to the soils, the development of projects on contaminated sites "is slowly gaining steam," Macknick said.

Progress Powering Mines

Electricity from a 15-megawatt solar facility located at Freeport-McMorRan's Bagdad copper and molybdenum open pit mine in Arizona powers about 5 percent of the complex's operations via a power purchase agreement with Arizona Public Service. Similar arrangements are playing out around the world.

For example, in Chile, where mining is the backbone of the economy and the nation's largest consumer of energy, renewables are playing a growing role in powering a portion of ongoing operations via power purchase agreements with utilities, according to Carlos Finat, executive director of ACERA, a Chilean advocacy group for renewable energy.

"It's clear that cost drives the decisions from the mining companies," he said in an email, noting that energy accounts for about 20 percent of miners' production costs in the country.

Notable projects in Chile include the El ArrayƔn 115-megawatt wind farm, the country's largest, which supplies power to Antofogasta Minerals' Los Pelambres copper mine under a power purchase agreement. SunEdison recently inaugurated a 100-megawatt solar photovoltaic plant in the Atacama Desert to supply power to CAP Group's iron ore mines.

The Chilean mining industry first turned to renewables in 2010 when a 1-megawatt solar photovoltaic plant was commissioned to supply Codelco's massive Chuquicamata copper mine. That project was largely symbolic, said Amanda Maxwell, an expert on Latin American energy issues with the National Resources Defense Council in Washington, D.C. But today, she said, economics are driving renewables adoption.

"The price of solar is cheaper than the cost of electricity on the sport market in Chile," she said.

World Takes Notice

The mining and renewable energy industries are also coming together for new projects from Australia to Africa.

First Solar, a global solar development company, for example, is developing a 5-megawatt solar photovoltaic plant to supply about 20 percent of the daytime electricity demand at a Rio Tinto-owned aluminum mine in Australia. Commissioning is expected later this year, according to a company spokesman. In South Africa, Harmony Gold Mining Company is involved with three solar photovoltaic projects as well as growing crops for bioenergy.

Among Harmony's objectives are to "ensure that we have some independence from the utility, especially in times when the power utility is experiencing supply constraints," Henrika Ninham, Harmony's investor relations manager, said in an email.

Renewable Limits

Ninham said that, at least for now, the appeal renewable energy holds for the mining industry has its limits. For one, those massive dump trucks that haul ore out of open pit mines require diesel fuel, and while biodiesel may be an option, approval to use it from the equipment manufacturers is essential and currently lacking.

Also, Ninham said, "solar power is great for daytime substitution, but the cost of storage prohibits using this source of energy during evening operations."

Even in Chile, where the development of solar is racing ahead, renewables account for only 2 percent of the grid in the northern mining sector, Maxwell said. "There is still a long way to go," she said.

Back in Wyoming, PacifiCorp has no plans for additional wind generation on the former coal mine or anywhere else in its service territory for at least the next 10 years, according to spokesman David Eskelsen. And the coal-fired 762-megawatt Dave Johnston Plant that the former Wyoming coal mine supplied is still running strong with coal from other nearby mines.

"If you look at the coal fleet the way it exists now," Eskelsen said, "we are probably going to operate many of those units for quite a number of years yet."