KGHM Polska Miedź may provide raw materials and buy ready PV panels. At the beginning of September the Ministry of Climate started to integrate the sector, but KGHM is missing from the letter signatories. The company could support the development of the domestic supply chain – writes Bartłomiej Sawicki, editor at BiznesAlert.pl.
Power from renewable energy sources
Prosumers are power consumers who generate power from their own renewable energy sources to cover their own needs, and release any surplus to the grid, or use the grid to get energy if they are not able to generate enough of it. KGHM Polska Miedź is one of the biggest producers of copper and other metals in the world. The company is also one of the biggest consumers of power in Poland, but it may become a prosumer as well. How? It may benefit from PVs and use green energy.
KGHM owns metals necessary for producing PV
Over a dozen rare metals and other raw materials are necessary for producing photovoltaic cells. Some of those are extracted by KGHM. Those include, among others, silver, selenium and of course copper. Silver is used in the latest technological solutions, for instance in infrastructure, motorization and PV. In general ca. 40 percent of the world’s silver production is used in the industry. Technical selenium that includes at least 99.4 percent of selenium is produced at the Głogów Copper Smelter. After processing, it is used in the glass industry and in the production of batteries. Whereas, the volume of copper that is typically used at a PV power plant with a capacity of 1 MW is between 3.1 to 4.8 t/MW. In 2019 KGHM extracted in Poland and abroad over 700 thousand tons of this element.
First and foremost, copper is a strategic asset in a carbon-neutral, closed circle economy. Almost 50 percent of copper in the European Union is produced from recycling. Over 22 millions of tons of copper will be necessary between 2020 and 2050 to transition the European economy into being climate neutral. Therefore, the basis and potential to become a beneficiary of the growing demand for those raw materials and elements are there. Additionally, according to declarations, the Polish PV industry is to be developed in Lower Silesia, where industry PV panels will be produced at PV component factory. KGHM may supply the facility with raw materials.
It is also worth mentioning that 25 of the biggest European companies from the steel industry established the European Raw Materials Alliance. They want to cooperate with EU institutions on solving regulatory and financial issues and initiate new projects together. KGHM Polska Miedź is one of the leaders of this initiative. The group advocates the idea that its deposits guarantee raw materials safety in the process of the European energy transition. The initiative is linked with the EU Action Plan on Critical Raw Materials, which has been recently unveiled.
KGHM could support the signatories of the PV letter
At the beginning of September a letter of intent was signed. It is a step closer to signing a PV sectoral agreement. It was not signed by KGHM, which, after all, could supply raw materials and buy ready products from the Industrial PV Panel program. Such a solution could be aided by the fact that the KGHM facilities are very close to the place where the components factory is to be constructed. KGHM could coordinate the supply of the resources for PV equipment production. This is why KGHM’s participation in the project should be considered. In return, KGHM would benefit from access to cheaper PV panels as well as their parts.
KGHM and PV projects
But why KGHM wants to invest in PV at all? According to KGHM’s 2018 strategy for the 2019-2023 period, the company aims to improve its energy efficiency by investing in its own low- and zero-emission generation. It also recognizes the investment opportunities offered by the energy sector, including PV. The strategy says that by the end of 2030, 50 percent of KGHM’s demand for power will be met through own sources and renewables. It is worth to remember that KGHM is among the biggest Polish power consumers, second only to the Polish State Railways (PKP). Each year it uses more than 2.5 TWh.
PV is the main pillar of KGHM’s energy production plan. The company owns 200 ha of land that will be used for its PV projects, 160 ha out of which are adjacent to facilities that need energy. Moreover, according to KGHM’s annual reports, the company could also invest in onshore wind farms. However, this would require an amendment to the so-called Proximity act, so that the company could receive new permits for wind farms. KGHM also wants to focus on corporate Power Purchase Agreements. KGHM’s first PV farm, which is located close to the Legnica Copper Smelter and refinery, is already under construction. Its capacity will be 3 MW. Another KGHM’s PV plant is being constructed on the premises of the company’s Tailings Plant. It will supply 5.4 GWh of power to the Lubin Mine each year. The latter project also includes the construction of a farm next to the Głogów Copper Smelter, which will generate 5500 MWh a year. All of the power will be supplied to the smelter.
By the third quarter of 2021, a 4 MW wind farm will be constructed next to the Głogów Copper Smelter. The other PV projects are PV Willow (Polish: Wierzba) I and II with the capacity of 16 MW and 50 MW respectively. They will be located on a willow plantation. The fifth project is the 30 MW Konrad farm located on the premises of the former mine called Konrad; and finally, the 5 MW Piaskownia Obora farm, located on the premises of the recultivated open-pit sand mine Piaskownia Obora. They both should be commissioned before mid-2022.
However, investments in PV are not the only decisions that will allow KGHM to cover 50 percent of its energy demand with own renewable energy sources. Improved optimization and development of conventional energy sources are also on the table. KGHM wants to increase the power generation from the existing combined cycle power plants and build gas turbines locally. It will splurge on R&D to find alternative options. The company also wants to use the heat generated during mining and smelting processes.