Xstrata Coal’s New South Wales (NSW) division signed up as a trial company for the Australian Government’s Energy Efficiency Opportunities programme in 2005 and submitted Energy Savings Actions Plans to the NSW Department of Energy, Utilities and Sustainability.

Energy efficiency opportunities assessments were conducted at eight mines in NSW, resulting in the development of a series of action plans. A total of 47 cost-effective projects were identified for immediate implementation, together with a number of additional projects that required more detailed assessment.

By the end of 2006, 32 of the 47 immediate projects identified had already delivered quantifiable environmental and economic benefits. These include:

• Annual energy saving of 13,686 GJ, a reduction of more than 1% of energy use across the sites;
• Consequently, a cost saving of 1% of energy costs;
• A reduction in greenhouse gas emissions of at least 3,700 tonnes CO2-e per annum.

In addition, we expect the programme to achieve further reduction in energy costs:

• Cost savings of at least 1% of energy costs year-on-year over the next five years, as the remaining 15 cost effective projects are evaluated and approved and additional energy assessments are conducted;
• Medium term cost savings of 3-5% of energy costs as energy efficiency is integrated into future design decisions and business systems such as procurement and the development of key performance indicators.

A key objective of the trial was to support culture change in energy management. A senior operational manager, Tony Egan, was appointed to drive the programme and attended each site meeting over an eight-month assessment process. External energy consultants were also used to assist the sites in prioritising and assessing potential projects.

To embed the programme as an integral part of everyday business an assessment process was developed to help site personnel identify, evaluate and manage energy efficiency opportunities. This recognises that site operators and managers are best placed to understand the energy efficiency opportunities at each operation, together with the potential challenges and investment required to achieve these.

Facilitated site workshops were held to identify a list of all possible energy efficiency opportunities, identifying 175 opportunities in total – typically around 30 to 50 projects per operation. A site-selected energy champion was appointed and each opportunity was allocated to a ‘project owner’. Preliminary investigations were conducted within four weeks of the initial audit, to maintain momentum.

Following prioritisation and ranking, 125 of the 175 projects were identified as having potential. Of these, 47 ‘operational projects’ were identified with a payback period of less than four years, and energy efficiency savings have been quantified for 32 of these.

Projects were split into two groups:

• process changes, such as automating lighting controls, improving conveyor controls and automating equipment shutdown. Typically these projects have a payback period of six months to two years, saving from A$20,000-A$65,000 per annum and can be implemented quickly to bring about incremental improvements in energy efficiency across the portfolio.
• technology changes, range from installation of high efficiency motors and variable speed drives, to the replacement of mainstream technology and unit processes with more efficient elements. Payback times are typically two to four years, with costs ranging from A$50,000 to A$8 million. The average reduction in energy use per dollar spent is 1MJ/A$, ranging from 0.5MJ/A$ to 9MJ/A$. Many of these projects are productivity projects which also result in energy efficiency outcomes.

For each of the 44 other projects identified as showing promise, a set of actions were developed and a date identified by which a business decision will be taken. These projects will continue the momentum of the initial energy actions in the medium term.

The direct costs of the assessments undertaken (including consultant fees and project manager) were paid for by the cost savings achieved in the first year. We are working to identify any indirect costs and benefits from the programmes as they progress over several years.

Assessments have since been completed at the remaining four Xstrata Coal NSW sites, at six Queensland operations and will be rolled out at Queensland and South African operations this year. Operations managers are required to report on progress on a regular basis and improvements in energy usage and intensity will be tracked to measure the outcomes of the programme.

Tony Egan, Xstrata Coal NSW Manager, Projects, said: “The opportunities identified at the eight trial sites are already being used in the design of new mines – both those currently under way and in our pipeline. Our aim is to bring about a step change in energy efficiency and to integrate energy planning at each stage of the life cycle of our mines.”