Element 25 executive director Justin Brown said that relying on gas only – as other existing mines do – would put electricity costs at around 12c/kWh; well behind Chinese competitors, whose electricity costs sit at around 7c/kWh.
The company is working with Murdoch University and Advisian to investigate exactly how far it can go with renewables, and various forms of storage.
Analysis done so far indicates that using a mixture of 50 per cent wind and solar will deliver a competitive price, likely around 9c/kWh. If the share of renewables is lifted to around 90 per cent, then costs may go even closer to competitors.
“We think we can improve on engineering to allow higher penetration of renewables, that will lower cost and the carbon intensity,” Brown says. That latter part is important, because Brown says that more and more international customers are demanding low-carbon supplies, and this creates added value.