<img src="https://www.webtraxs.com/webtraxs.php?id=sepconet&amp;st=img" alt="">
Skip to content
772-220-6615         info@sepconet.com         CADDetails

Independent Power Producers – Can They Boost Profitability?

SEPCO 4/3/19 10:00 AM
Independent Power Producers – Can They Boost Profitability

Sites eager to boost their mining power and power generation reliability may benefit from contracting an independent power producer. Although short-term power solutions have their advantages, independent power producers are effective in combating power outages and other power-related problems.


In Africa, mining is one of the largest energy consumers. Combined with fluctuating fuel prices and varying power demands, obtaining reliable power solutions for remote sites can be challenging.


By choosing the right Independent Power Producer (IPP), you can boost your site’s profitability through flexible power options that are underpinned by greater reliability. IPPs are non-utility generators that are co-located at individual mine site operation – an “in-house” dedicated electricity supplier if you like. They’re renowned for providing significant compliance with power production requirements and an ability to provide continuous power supply on a 24/7 basis all year round.


If you’re looking to boost profitability and power reliability, here’s why you should consider an IPP.


Increase Efficiency and Minimize Downtime

It can be cost-inefficient to take on the operation of your own power plant, something that is rare within the core skill set of mining personnel. Instead, IPPs have a sole focus and responsibility to stable, energy-efficient power geared for long-term results.


Improved fuel efficiency can be achieved to positively impact on profitability. Typically, the mining operation will supply fuel to the IPP, who is tasked and measured by agreed fuel efficiency targets. Financial penalties apply to IPPs that don’t meet the fuel efficiency targets (effectively reimbursing the customer for the cost of extra fuel consumed above the agreed target rate). Some contracts may also specify a shared fuel savings model, which can increase profitability further by sharing in fuel savings achieved above an agreed target.


Fuel consumption efficiency is a critical measure but must be achieved without sacrificing reliability and financial penalties also apply under the IPP model if power outages occur.


These penalties and savings mechanisms provide great assurance to the mining customer that they will have a reliable, cost-efficient power supply for their operation.


IPPs are also now combining thermal baseload power with renewable innovations, such as solar hybrid technology, which contribute to further savings and lower emissions.


IPPs help keep mining operations profitable through renewable resources, long-term performance, and cutting-edge technology to meet varying power demands for individual sites.


Lower Implementation and Infrastructure Costs

For mining sites who want to be more flexible with funding and achieve a lower risk profile, contracting an IPP can help reduce capital and operating expenses.


Building, running and maintaining your own power plant comes with high capital outlays and ongoing operating expenses in parts, consumables, oil and labor. However, IPPs relieve these financial pressures by combining them into one guaranteed electricity supply rate, leaving you with more financial leverage.


For your power system to be fully flexible and cost-effective, it must be specifically designed to meet the requirements of your mine site. A reputable IPP will work with you to meet these objectives and increase your site power output and capacity.


Improve Sustainability

Because IPPs offer less fuel consumption for both diesel and gas gen-sets, power density is increased and fewer carbons are emitted, ultimately boosting sustainability. The use of renewable resources also contributes to sustainable power generation practices for remote mine sites.


Sustainable long-term alternatives for power generation offer more efficient solutions, reduce costs and help to conserve the local environment. Solar, hybrid, wind, and water power minimize energy costs, as well as position your site as green-friendly.


Manage Safety

Along with fuel and energy costs, safety is one of the most critical considerations for mining sites. To minimize your site’s risk profile, IPPs handle the entire safety concerns and risk management relating to mine site power supply.


IPPs can offer valuable long-term power solutions. But before mine sites invest in contracting an IPP, it’s important to consider other factors such as market demand, contract procurement and revenue security.


Author Bio: This article is written by a local content writer, Jayde Ferguson. Catch her on LinkedIn.