Our Energy & Utilities team have been looking ahead at the trends in the energy sector for 2023.
Mining companies are increasingly investing in and developing their own technologies to support decarbonisation plans and increase productivity. We predict that the following two technologies will increasingly be adopted in 2023:
In 2022 we saw a number of joint venture and collaboration agreements between mining companies and researchers in relation to developing and trialling green hydrogen technologies. We also saw the potential of using green hydrogen in hydrogen fuel cell trucks to support decarbonising mining fleets currently using diesel. Green hydrogen technologies are notably costly and technically challenging to develop, therefore we also expect collaboration to continue.
In 2022 we also saw a number of mining companies announcing investments and joint ventures into large scale renewable projects. Typically, the projects involved the installation of renewable energy assets such as solar and wind, upgrading transmission networks and installing large-scale battery storage to support decarbonisation of sites. The Bird & Bird team have advised on one of the largest solar projects for a mining project in Africa. We expect this trend to continue as sites are well positioned with land, access to technical expertise, wind and solar resources. Advice on financing arrangements, energy infrastructure and power purchase agreements will be key.
The war in Ukraine has highlighted international reliance on scarce energy supplies. As a result, the increase in energy costs has accelerated global investment into the clean energy transition, whereby renewable energy assets are localised. Notably, however, green technologies require critical minerals (such as lithium, cobalt, and rare earth elements) which are often challenged by geographical constraints. The outlook of growing global demand for green technologies and an increase in resource nationalism - the balance between attracting foreign investment and ensuring the benefits of mineral extraction are passed on nationally – should encourage Governments to adopt more flexible policies to support commercial opportunities for critical mineral exploration and development domestically, to shorten supply chains.
May 31 2023
May 31 2023