THEnergy supports off-grid renewable energy projects

Mining companies can get renewable energy without initial investment: 200 to 400 million euros for solar-, wind-diesel hybrid and storage projects THEnergy signs a contract with an international renewable energy finance company to support in the development of a pipeline for off-grid renewable energy projects at mines

A renowned international finance company has mandated THEnergy to build a pipeline of off-grid renewable energy projects. The fund has a global scope and the installations are supposed to be in off- or weak-grid areas. “We would like to address mines that are not connected to the grid, source their energy from diesel power plants and are interested in decreasing their electricity bill,” said Dr. Thomas Hillig, founder of THEnergy.

One of the main barriers for diesel displacement projects with wind and solar was very substantial capex, which means that the energy bill had to be paid in advance. The fund will act as an independent power producer (IPP) and offer power purchase agreements (PPAs) to mining companies.

In the past, the finance company has issued renewable energy funds that focused on investing in grid-connected projects, including PPAs for commercial consumers. Mines and large, remote industrial customers have been identified as the main investment targets.

Regarding size, the mine should have an actual load of five megawatts and more. The equity is scheduled to be invested within an investment period of three years. Taking into account additional debt capital, on a project level the finance company expects a total investment of 200 to 400 million euros.

To speed up the investment process, the investor is considering financing the entire project with equity in a first step and refinancing it at a later stage. The finance company can even use an existing renewable energy fund that is successfully investing in renewable energy assets in many countries, to acquire off-grid projects even before the new fund is established.

With the involvement of external investors, for mining companies renewable energy becomes a standard electricity product that can be sourced in the same way as traditional energy–that means without initial investment costs into generating plants.

THEnergy has already predicted this development in a study that was released in December 2014.

“External financing of solar, wind and storage solutions at off-grid locations allows mining companies and financial players to focus on their core competencies. In the near future, we will see many more off-grid renewable energy applications at mines,” said Hillig. The mining company saves money, does not have to invest and can use the renewable energy integration for its corporate sustainability program. The above-mentioned study, “Solar-diesel-hybrid power plants at mines: Opportunities for external investors,” can be downloaded.