What to Expect with On-Site Electric Power Systems

When mining companies are looking to purchase energy efficient and cost-effective onsite power generator, before they can receive an accurate a price estimate, they first have to know what power range they need and what traditional fuels, such as heavy fuel oil, diesel and natural gas, or sustainable fuels such as coal seam gas and biogas, they plan to use.

In addition, they have to consider the application, power need, fuel costs, infrastructure, service requirements, scope of equipment supply, transportation, logistics, and so on, according to Nick Kelsch, gas application consultant, Caterpillar.

All of these factors impact the power solution, and they also affect the cost. Every installation is unique in some respect, and it’s impossible to provide an accurate price without working through the details, Kelsch says.

Since the project scope and costs can still vary dramatically from site to site and country to country, installed costs can be significantly lower in lesser regulated countries due to differences in standards, emission requirements and labor costs, he adds.

The generator prices listed are for the usual onsite systems and are based on these four factors: 1.) Mechanical costs – engine generator, outdoor enclosure, fuel tanks or gas train, exhaust/silencer, radiator, air filters and mechanical contractor installation; 2.) Electrical costs  ̶ switchgear or transfer switch, communications, cable and conduit, batteries, breakers and electrical contractor installation; 3.) Commissioning  ̶  onsite liquid fuel fills, coolant, oil, technician service, project management and basic operator training; and 4.) Freight shipment of everything to a U.S. location.

• Diesel Emergency Power System = $590 per ekW;
• Natural Gas Emergency Power System = $720 per kW.

A 1,000 kW combined heat and power (CHP) system with the same assumptions as above plus heat recovery for hot water production can be estimated:

• Natural Gas CHP System = $852 per ekW.

An installed and commissioned 1,000 kW, industrial-grade uninterruptible power supply (UPS) system can be estimated:

• Battery UPS System = $470 per ekW.
• Flywheel UPS System = $540 per ekW;

Operating costs for a 1,000 kW rental power system are as follows:

• Diesel Rental Power Cost (100h with fuel at $4/gallon) = $0.52 per kWh;
• Natural Gas Rental Power Monthly Rate (100h with fuel at $5/MMBtu) = $0.67 per kWh;
• Diesel Rental Power Cost (600h with fuel at $4/gallon) = $0.36 per kWh;
• Natural Gas Rental Power Monthly Rate (600h with fuel $5/MMBtu) = $0.23 per kWh.

Sometimes government regulation dictates priorities for power systems. Other times the cost of a potential power outage far outweighs the capital and maintenance costs, according to Kelsch. For a renewable biogas energy project, benefits are defined in terms of profit and reduced social costs such as reduced carbon and odor emissions.