Major fossil fuel firms are using renewable energy to cut costs

'We expect that the contribution of renewable energy will increase over time,' says BHP Billiton

Haizhou mine, Liaoning province. Only Russia and the US have greater coal reserves than China (EPA)

Major mining companies, including some of the world's biggest suppliers of fossil fuel, are seeking to use more renewable energy themselves as they strive to drive down costs and curb emissions.

Glencore, the world's biggest shipper of seaborne coal, said in its 2017 sustainability report that it gets 19 per cent of its energy from renewable sources, up a percentage point from last year's report.

At the same time, the company reiterated its view that the wider world would carry on burning coal, the most polluting fossil fuel, and it does not see a risk of its own coal operations becoming stranded assets.

"While it is clear that the relative share of renewable energy will grow, the absolute volume of fossil fuels will also grow due to overall growth of energy demand," the report said.

"Coal remains an important, secure and reliable industrial input that currently accounts for 40 per cent of the world's electricity, 70 per cent of global steel and 90 per cent of global cement."

As talks take place this week in Bonn on implementing the 2015 Paris Agreement on climate change, Glencore said it supports climate and energy policy that reduces global emissions in the most cost-effective manner while ensuring energy security.

Costs for renewable power have fallen sharply and environmental campaigners say it is often the cheapest fuel.

The miners say that coal still can be the cheapest, most reliable baseload power depending on circumstances, but the sector has been turning to renewable energy, such as wind and solar power, in the kind of inaccessible regions where mines are found and supplies from the grid can be unreliable.

Of the four biggest miners, only Rio Tinto uses a significantly higher percentage of renewable energy than Glencore.

In total, it burns a massive 454 petajoules of energy across all its operations. Of this, about 36 per cent is from renewable sources, mainly hydropower used for highly energy intensive aluminum smelting. It markets its aluminum as a low-carbon product.

The world's No. 1 miner by market capitalization and the biggest supplier of coking coal used in steelmaking, BHP Billiton, uses very little renewable energy (less than 2 per cent) after some of its assets, including aluminum operations powered by hydro-electricity, were spun off into South32 in 2015.

It said, however, that it will use more renewable power at its remaining assets.

"In accessing power, we seek the optimal combination of price, security of supply and emissions intensity," BHP said in an emailed statement.

"We expect that the contribution of renewable energy will increase over time within power grids and as standalone opportunities for our operations."

BHP also said it is contributing to the Lakeland Solar and Storage project in Australia, which is researching how to provide reliable supply in remote locations.

Anglo American said it has consistently sourced about 12 per cent of its energy from renewables and is working on biomass, wind and solar projects to increase that share.

Reuters