Energy

Power plant repoweringAs part of our vision for the future, we plan to convert three boilers at the onsite power plant to combined-cycle natural gas, which will double the amount of power available, while reducing air emissions by half. This project will use state-of-the-art technologies to boost efficiency and production while providing significant environmental benefits, such as cleaner air for the Salt Lake Valley.

Currently, the power plant produces 175 megawatts (MW) using four boilers powered by either coal or natural gas. Upon receipt of internal and external approvals, we will replace three of the four existing boilers with one natural gas turbine that can generate 175 MW and a new waste heat boiler. We will use heat recovered from the natural gas turbine’s exhaust to power the three turbines formerly powered by steam from the existing boilers. The repowering project will double the power plant’s generating capacity to 350 MW.

These efforts led to the December 2011 approval of an air permit for the power plant by the Utah Division of Air Quality.

Combined heat and power systemAt Kennecott, we are committed to researching and implementing additional ways of increasing power supply and energy efficiency throughout our operations. The new $10-million, 6.2-megawatt (MW) combined heat and power (CHP) system that we commissioned in December 2010 at our refinery is an excellent example of this commitment. The CHP system is more than 80 percent energy efficient compared to separate heat and power systems, which are estimated to be less than 50 percent efficient. The 6.2-MW CHP system produces enough electricity to power 6,000 average-sized homes.

CHP, also known as cogeneration, is an efficient, clean and reliable approach to generating power and thermal energy from a single fuel source. The refinery CHP system meets the steam requirements of the refinery and provides up to 50 percent of the electrical needs of the plant.

The steam produced by waste heat from this CHP system replaces steam that was previously supplied by a natural gas boiler system. It increases the facility's operational efficiency and decreases energy costs. At the same time, CHP reduces the emission of greenhouse gases, which contribute to global climate change. CHP technology represents an innovative approach to energy planning because the electrical power is being generated on-site rather than at an off-site power plant - an approach called "distributed generation."

The CHP system uses a natural-gas-fired turbine generator combined with a heat-recovery steam boiler to capture heat from hot turbine exhaust for the efficient production of process steam used at the refinery. In addition to powering 50 percent of the plant's electrical needs, the CHP system reduces air emissions by more than 90 percent. We will soon install a similar 6.2-MW CHP unit at our new molybdenum autoclave processing (MAP) facility in 2012, bringing the CHP investment to $20 million.

With the addition of the refinery CHP, our power supply from alternative and high-efficiency power sources is now at 13 percent. When the MAP CHP comes online in 2012, our power supply from alternative, high-efficiency power sources will be at 16 percent.

Key benefits of our CHP system:

• Produces up to 6.2 MW per hour — equivalent to the electrical needs of 6,000 average-size homes
• Produces up to 70,000 pounds of steam per hour
• Provides distributed onsite steam and power production for use in the copper refining process
• Improves power generating efficiency to above 80 percent, compared to about 50 percent for traditional power plants
• Diversifies our energy generation portfolio and improves power reliability

Smelter cogenerationThe smelter captures and converts the waste heat from the flash smelting and converting furnaces at the acid plant to generate about two-thirds of its electrical demands. The smelter recovers the heat as a low-pressure steam, which is combined with exhaust steam from the acid plant steam turbine compressors. The steam makes its way to the powerhouse where up to 32 megawatts of electricity can be produced in a steam turbine generator.

Solar and windAn important part of ensuring responsible mineral production is to continually reduce the environmental impact of our energy supply. Kennecott has made a number of energy supply improvements, including the increased usage of renewable energy such as micro-wind turbines and solar photovoltaic (PV) systems.

Kennecott has installed five micro-wind turbines, or windspires, to reduce carbon dioxide emissions by about 12 metric tons per year. They can generate up to 1.2 kilowatts of renewable energy when wind conditions are favorable. The windspires generate approximately 10,000 kilowatts of electricity each year, which is about the amount consumed by one average home.

We also installed a 5-kilowatt solar PV at the Mine Visitors Center. In addition to generating renewable energy, this system collects valuable wind, sunlight and temperature data, which can be used to determine the location’s solar resource to predict the output of future solar PV systems at Kennecott.

The PV system is part of a Rio Tinto initiative to install solar monitoring systems at all its operations. Rio Tinto has installed more than 20 systems already, primarily in Australia. The data collected will help Rio Tinto prioritize where to install larger solar PV systems globally as they become more competitive with traditional sources of electricity.

Idle reduction programThe award-winning Vehicle Idling Reduction Program started in 2008 as a pilot program and continues to grow each year. The goal is to have 100 percent of our vehicles fitted with Global Positioning System (GPS) Insight monitoring equipment. The GPS Insight monitoring system tracks location, idling time, fuel usage, speed and other vehicle metrics.

The idle reduction program has been highly successful and has returned many benefits in fuel savings and emission reductions. Since 2008, the program has grown from 28 vehicles to 360 vehicles and has resulted in more than 12,700 tonnes of CO2e.

This program has also created greater cultural awareness of the impacts of idling. Employees are not only reducing idling at work, they are taking this thinking home and reducing their idling in the community.

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CNG vehicle programIn the spirit of energy efficiency, the Kennecott Operational Services team commenced a program to pilot the use of Compressed Natural Gas fuel in our light- and medium-duty vehicles in 2010. This pilot included the trial of 10 different CNG vehicle conversion systems and installation of a CNG fueling station at our northern operations. Replacing gasoline with CNG reduced both criteria emissions and greenhouse gas emissions.

Initially, three different vehicle types were considered for our light- and medium-duty fleet — electric, hybrid and CNG — and were evaluated to determine which type would be most feasible. We chose compressed natural gas technology for this project due to the technology being available for installation in the medium-duty fleet, a roughly five-year payback period on conversions, and the minimal differences between conventional fossil-fuel vehicle maintenance and CNG vehicle maintenance.

Once CNG was selected, Kennecott initiated a pilot project to determine the feasibility of using CNG vehicles. Given the pilot’s large success, we committed to increasing the use of CNG vehicles across the operation. We also installed a CNG fueling station on the north end of our operation with plans to install an additional station. At the conclusion of 2011, there were 10 vehicles in the CNG fleet. We have since increased this and now currently operate 19 CNG vehicles in a 443 light- and medium-duty vehicle fleet. This year the program is expected to expand to 40 vehicles and up to 70 by the end of 2013. All vehicles converted to CNG are EPA certified. We chose to use EPA-certified conversion equipment as it has been thoroughly tested and conforms to the highest standards of operation.

To date GHG emissions have been reduced by roughly 18 percent per vehicle, other emissions were reduced by some 51 percent per vehicle, and fuel costs savings of 61 percent realized. Fuel efficiency has remained the same relative to conventional gasoline mileage for new vehicles. Efficiency for maintenance lubricants has risen as motor oil changes are scheduled every 4,000 miles versus every 3,000 miles for conventional gasoline motors, which is expected to increase to 5,000 miles in the next year.