Board presentations demand precision. When proposing renewable energy investments – whether battery energy storage systems, solar-diesel hybrid microgrids, or stand-alone power systems – executives need financial clarity, risk assessment, and operational impact data. A structured renewable energy business case template transforms complex technical proposals into compelling investment decisions.
Mining operations, remote industrial facilities, and off-grid sites face escalating diesel costs, emission reduction targets, and power reliability challenges. Building a net zero mining business case requires translating technical solutions into board-level decision frameworks with quantified returns, risk mitigation strategies, and implementation roadmaps.
Financial Modelling for Energy Storage Projects
Establishing Diesel Consumption Baselines
Start with diesel consumption baseline data. Remote mining sites typically consume 2-5 million litres annually, with fuel costs representing 30-50% of total energy expenditure. Calculate current all-in diesel costs including transport (often $0.40-$0.80/litre for remote locations), storage infrastructure, and handling.
Modelling Hybrid System Performance
Model hybrid system performance using HOMER Grid or PVsyst software. Input actual load profiles (not averages), solar resource data from Bureau of Meteorology, and battery specifications. For a 1MW solar array with 2MWh lithium-ion battery storage, typical diesel displacement reaches 40-70% depending on load variability and solar resource quality.
Calculate levelised cost of energy (LCOE) across a 20-year project life. Include capital expenditure, operations and maintenance, battery replacement (typically year 10-12 for lithium-ion systems), and diesel fuel escalation (historically 3-5% annually). Compare against diesel-only LCOE to determine savings trajectory.
Present three scenarios: conservative (30% diesel displacement), base case (50% displacement), and optimistic (70% displacement). This approach acknowledges uncertainty whilst demonstrating robust returns across performance ranges. Most boards prefer conservative projections with upside potential rather than aggressive forecasts. A well-structured renewable energy business case template includes all three scenarios with clearly stated assumptions.
Capital Cost Breakdown and Funding Options
Structuring Transparent Capital Costs
Structure capital costs transparently. For a 500kW solar, 1MWh battery, diesel genset hybrid system serving remote industrial operations:
- Solar PV array: $400,000-$600,000 (including mounting, inverters, DC cabling)
- Battery energy storage: $500,000-$800,000 (containerised lithium-ion system with thermal management)
- Power conversion: $150,000-$250,000 (bidirectional inverters, switchgear, protection)
- Control systems: $100,000-$150,000 (microgrid controller, SCADA, monitoring)
- Installation and commissioning: $200,000-$300,000 (civil works, electrical integration, testing)
Total installed cost typically ranges $1.35-2.1 million for this configuration, or approximately $1,350-$2,100/kWh of storage capacity. Deploying a battery energy storage system with proven thermal management and LFP chemistry ensures the cost projections presented to the board reflect reliable, long-lifecycle technology.
Exploring Funding Mechanisms
Explore funding mechanisms beyond internal capital. Clean Energy Finance Corporation (CEFC) provides debt financing for commercial renewable energy projects. Some mining companies structure power purchase agreements where providers own and operate systems, converting capital expenditure to operational expenditure.
Australian Renewable Energy Agency (ARENA) grants support innovative deployments, particularly in remote applications or emerging technologies. State government programmes in Western Australia, Queensland, and Northern Territory offer additional incentives for off-grid renewable energy.
Risk Assessment and Mitigation Strategies
Addressing Technology, Performance, and Operational Risks
Boards focus heavily on project risks. Address these systematically in the renewable energy business case template.
Technology risk: Lithium-ion batteries have a proven track record with 6,000+ cycles at 80% depth of discharge. Reference AS/NZS 5139 compliance and IEC 62619 safety certifications. Include manufacturer warranties (typically 10 years or 6,000 cycles) and performance guarantees.
Performance risk: Conservative modelling addresses this concern, but also specify performance monitoring systems. Real-time SCADA visibility allows immediate response to underperformance. Include performance guarantees in engineering, procurement, and construction contracts.
Operational risk: Remote sites require maintenance accessibility. Containerised systems simplify servicing with modular, field-replaceable components. Specify maintenance intervals (typically quarterly inspections, annual comprehensive service) and local support capabilities.
Building Board Confidence Through Risk Transparency
Diesel backup redundancy: Hybrid systems retain diesel gensets for backup, eliminating single-point failure concerns. This addresses board concerns about power reliability better than pure renewable approaches – a critical element of any net zero mining business case that must balance ambition with operational pragmatism.
Regulatory risk: Grid-connected systems must comply with AS/NZS 4777 and AEMO requirements. Off-grid systems face fewer regulatory constraints but should meet Australian Standards for electrical safety and battery installation. Deploying a stand-alone power system engineered to Australian standards ensures compliance is built into the design from the outset.
Operational Benefits Beyond Fuel Savings
Quantifying Maintenance, Power Quality, and Emissions Benefits
Quantify non-financial benefits that resonate with boards focused on operational excellence and corporate responsibility.
Reduced maintenance: Diesel gensets running at high utilisation require major overhauls every 15,000-20,000 hours. Hybrid systems reduce diesel runtime by 40-70%, extending maintenance intervals and reducing downtime. Calculate avoided maintenance costs (typically $0.02-$0.04/kWh diesel generation).
Power quality improvement: Battery systems provide instantaneous response to load changes, improving voltage stability and reducing equipment stress. For mining operations with sensitive electronic equipment or autonomous systems, this prevents costly disruptions.
Emissions reduction: Calculate avoided CO2 emissions using 2.7kg CO2 per litre diesel. A system displacing 1 million litres annually avoids 2,700 tonnes CO2 equivalent. This supports corporate sustainability commitments and increasingly influences mining company social licence to operate – a growing priority in any net zero mining business case.
Strategic Benefits That Influence Board Decisions
Noise reduction: Solar and battery systems operate silently compared to diesel gensets. For mining camps, telecommunications sites, or facilities near communities, this improves amenity and reduces community relations challenges.
Fuel logistics simplification: Remote diesel delivery requires road trains, fuel storage infrastructure, and handling equipment. Reducing diesel consumption by 50% halves logistics complexity, improves safety (fewer fuel movements), and reduces supply chain vulnerability. Integrating a rapid solar module into the generation mix accelerates deployment timelines, reducing the period of diesel dependency during project ramp-up.
Implementation Timeline and Milestone Planning
Five-Phase Deployment Schedule
Boards need realistic deployment schedules. Break projects into clear phases with decision gates:
Phase 1 – Feasibility (8-12 weeks): Site assessment, load profiling, solar resource measurement, preliminary design, financial modelling, and business case development. Deliverable: Board decision package with go/no-go recommendation.
Phase 2 – Detailed design (12-16 weeks): Final system sizing, electrical design, procurement specifications, contractor selection, and regulatory approvals. Deliverable: Fixed-price contract and construction schedule.
Phase 3 – Procurement and manufacturing (16-24 weeks): Equipment orders, factory acceptance testing, shipping to site (particularly relevant for remote Australian locations), and pre-delivery inspections.
Phase 4 – Construction and commissioning (12-20 weeks): Civil works, equipment installation, electrical integration, protection testing, and performance verification. Deliverable: Commissioned system with performance baseline.
Phase 5 – Performance validation (12 weeks): Monitor actual performance against modelled projections, optimise control strategies, and document savings. Deliverable: Performance report validating business case assumptions.
Cash Flow Timing and Return Commencement
Total project duration typically spans 12-18 months from board approval to full operation. Present this timeline clearly so boards understand cash flow timing and when returns begin accruing. CDI Energy has delivered projects across this full lifecycle for mining and remote industrial clients throughout Western Australia and beyond.
Performance Monitoring and Reporting Framework
Establishing Key Performance Indicators
Establish key performance indicators that track business case assumptions. Boards appreciate ongoing validation of investment decisions through transparent reporting:
- Energy metrics: Total generation (kWh), diesel displacement percentage, battery cycles, system availability (target >98%), and round-trip efficiency
- Financial metrics: Diesel fuel saved (litres and dollars), maintenance cost reduction, actual vs projected LCOE, and payback period tracking
- Environmental metrics: CO2 emissions avoided, diesel consumption reduction, and renewable energy percentage
- Operational metrics: Unplanned downtime events, maintenance interventions, battery state of health, and power quality incidents
Ongoing Board Reporting and Investment Validation
Configure SCADA systems to generate automated monthly reports. This eliminates manual data compilation whilst providing boards with consistent performance visibility. Many hybrid solar systems include cloud-based monitoring platforms accessible to executive teams, providing real-time dashboards that validate the assumptions underpinning the original renewable energy business case template.
Comparative Analysis Against Alternatives
Diesel-Only vs Hybrid Renewable vs Grid Connection
Boards evaluate renewable energy investments against other capital allocation options. Strengthen the business case by explicitly comparing alternatives:
Status quo (diesel-only): Baseline case with fuel cost escalation, maintenance costs, and emission liabilities. Typically shows 15-25 year net present cost of $8-15 million for a 1MW remote site.
Hybrid renewable system: Higher upfront capital ($1.5-2.5 million) but 40-70% lower ongoing costs. Net present cost typically $5-9 million over the same period, demonstrating $3-6 million net savings.
Grid connection: For fringe-of-grid sites, compare hybrid systems against grid extension costs. Grid connection capital often exceeds $50,000/km for remote locations, making stand-alone power systems economically superior beyond 15-20km from existing infrastructure.
Alternative Technology Comparison
Compare lithium-ion against lead-acid batteries (lower capital but 1,500 cycle life vs 6,000+ for lithium-ion), or hydrogen systems (emerging technology with higher costs and lower round-trip efficiency). Present this analysis in net present value terms using company-standard discount rates (typically 8-12% for mining and industrial projects). This allows direct comparison against other capital projects competing for board approval.
Addressing Common Board Questions
Diesel Price Sensitivity and Battery Degradation
Anticipate and pre-emptively answer standard executive concerns in the net zero mining business case presentation.
“What if diesel prices fall?”: Model sensitivity analysis showing returns at diesel prices 20-30% below current levels. Most hybrid projects remain cash-positive even at significantly lower fuel costs due to maintenance savings and equipment life extension.
“What happens when batteries degrade?”: Lithium-ion batteries retain 80% capacity after 6,000 cycles at 80% depth of discharge. Model battery replacement in year 10-12 as planned capital expenditure. Even with replacement costs, lifecycle economics remain strongly positive.
Scalability, Technology Evolution, and Remote Maintenance
“Can this approach scale?”: Start with pilot deployment at a single site, then replicate proven design across multiple operations. This staged approach reduces risk whilst building internal capability and supplier relationships. Reviewing CDI Energy’s delivered projects provides boards with evidence of proven, repeatable deployment across diverse mining and remote industrial applications.
“What about technology improvements?”: Acknowledge battery costs declining 15-20% annually historically. However, waiting for future improvements means foregone savings today. Calculate opportunity cost of delayed deployment vs potential future capital savings.
“Who maintains these systems remotely?”: Specify local service capabilities. Australian-engineered systems include remote diagnostics, spare parts inventory, and technician training for site personnel. Critical components have redundancy to prevent single-point failures.
Building Internal Stakeholder Support
Cross-Functional Engagement Strategy
Board approval requires groundwork across multiple functions. Engage key stakeholders early in business case development:
- Operations teams: Involve site managers in load profiling and system requirements definition. Their input ensures designs meet operational realities and builds implementation support.
- Maintenance personnel: Address concerns about unfamiliar technology through training commitments and supplier support agreements. Emphasise that modern battery systems require less intervention than diesel gensets.
- Finance teams: Collaborate on financial modelling assumptions, discount rates, and cash flow projections. Their endorsement strengthens board credibility.
- Sustainability groups: Leverage corporate emission reduction commitments and ESG reporting requirements. Renewable energy investments directly support publicly stated climate goals – a net zero mining business case resonates strongly with sustainability leadership.
- Procurement specialists: Engage early on supplier selection criteria, contract structures, and performance guarantees. Their commercial expertise improves deal terms.
Securing Board Approval for Renewable Energy Investment
Board-ready business cases for renewable energy investments require financial rigour, risk transparency, and operational clarity. Start with accurate diesel consumption baselines and site-specific load profiles. Model hybrid system performance using professional software tools with conservative assumptions across multiple scenarios.
Structure capital costs transparently and explore funding alternatives beyond internal capital. Address technology, performance, and operational risks systematically with specific mitigation strategies. Quantify operational benefits including maintenance reduction, power quality improvement, and emissions avoidance that extend beyond direct fuel savings.
Present realistic implementation timelines with clear decision gates and deliverables. Establish performance monitoring frameworks that provide ongoing validation of investment returns. Compare renewable options explicitly against diesel-only baseline and alternative approaches using net present value analysis.
Remote Australian operations face unique power challenges – extreme temperatures, isolation, and high diesel costs. Hybrid renewable systems deliver proven returns whilst supporting emission reduction commitments and operational resilience. A well-constructed renewable energy business case template translates these technical solutions into board-level investment decisions backed by quantified financial returns and risk mitigation strategies. For feasibility assessment and business case development support specific to remote power requirements, consult our hybrid solar engineers or email us on info@cdienergy.com.au.