Oil price dumping improves mining companies' position to adopt renewable energy
The price for crude oil is falling, and the diesel price is following. This development is triggered partly by the demand side, as China’s economy is not growing as quickly as expected. We can however see a more interesting development on the supply side.
OPEC is sitting on the driver’s seat of the recent oil price tumble. The price of the OPEC basket of twelve crudes recently fell below $28.50 per barrel. A dumping-like strategy by OPEC seems to be aimed at preventing long-term investment by other oil producing nations. An oil price in the twenties means hardly a dozen nations can produce oil economically. Similar consequences arise for related energy forms, such as renewables.
In solar– and wind–diesel hybrid applications, the business case consists of partly replacing expensive energy from diesel with inexpensive solar or wind energy. As diesel prices are falling, the equation seems to be no longer valid. On closer examination, we see that mining companies that typically have huge energy needs for their production processes can actually take advantage of the situation.
More and more investors are willing to finance large solar and wind power plants at remote mine sites and sell diesel reductions or electricity back to miners in so-called power purchase agreements (PPAs). When the oil prices were high, the investors were looking at much higher electricity prices in these long-term PPAs. High diesel prices gave the appearance that there was a large piece of cake to share between the mining company and the investor. In PPAs, the electricity price is often fixed over a period of 20 years or more.
Many experts see oil prices recovering very quickly because, amongst other reasons, OPEC leaders such as Saudi Arabia need the revenue from oil for their national budgets. Against this background, it is obvious that it is clearly in the interest of intensive energy users, such as mining companies, to lock in low electricity prices over a long period of time. Their negotiation positions for renewable energy PPAs have improved considerably through the recent oil price drop. Clever anti-cyclical decision-making often allows for high profits in the long term.
The business case for renewables at mine sites is often still very advantageous. Long-term investment decisions must take into consideration expectations about long-term developments. “In reality, we still see that more and more renewable projects are now being developed at mine sites,” said Dr. Thomas Hillig, CEO of THEnergy. “At the same time, falling oil prices appear to be slowing the project implementation. Mining companies want to see considerable cost savings immediately.”
With the current oil price development, it would very often make sense to commit to long-term PPAs even if renewable energy prices can only match diesel prices. The cost savings will come in later, as soon as the oil price recovers. If mining companies wait to make their decision, it is likely that they have to pay more for electricity from renewable resources – for the whole contract duration.
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NetNumber: Time for a cloud-native transformation
NetNumber is accelerating the transition in the telecom industry to 5G as it starts a shift to cloud-native architecture to address the fast-paced demands of global subscribers and businesses.
NetNumber is offering the industry’s first cloud-native platform designed to ensure InterGENerational™ network performance addresses both the legacy and next-generation requirements of telecom networks.
“NetNumber has developed the industry’s most robust cloud-native, InterGENerational platform that addresses both the legacy and 5G requirements of telcos,” said Matt Rosenberg, Chief Revenue Officer of NetNumber.
The platform provides vertical and horizontal scale-out with low latency, coupled with a suite of data replication capabilities, which provide flexible architectural options that can evolve with the changing network over time.
“Cloud-based solutions from other vendors tend to be limited in terms of supporting particular network generations or protocols. We’ve created our latest platform TITAN.IUM to allow customers to take any generation of applications, any generation of legacy services and protocols and move them into the new world of cloud-native architecture,” said Rosenberg.
“This is a really important part for a carrier to harmonise their network, bring data services together, bring legacy with new together in order to make a more effective and efficient network, as well as reduce their cost as they scale forward,” he said.
Established in 1999, NetNumber has fostered a strong team environment that leverages the industry’s best skills to offer software solutions tailored for carriers of all dimensions. Based outside of Boston and with presence in over 20 countries, the company delivers a range of products that address all generations (2G, 3G, 4G, 5G) of network functions in the core network, deep rooted security products and services, STIR/ SHAKEN and set of options around data services in more than 90 countries.
Steeped in experience in building telecom solutions, software, protocol stacks, and integration of third party tools, the company’s development organisation has proven to supply to the industry with the most reliable and flexible solutions on the market.
“At NetNumber, we focus on our core competencies – we are dedicated to providing industry expertise in signaling, routing, security, subscriber management and data services. We provide customers a strong ROI through platform-based solutions that reduce Capex and Opex in the long-term,” commented Rosenberg.
Five reasons why customers choose NetNumber:
- Expertise - NetNumber has experts with deep knowledge in signaling/routing, security, and subscriber database management.
- Integration - An industry-first platform brings together domain services, applications, security, and global data services.
- Scale - NetNumber has the ability to seamlessly increase network efficiency using vertical and horizontal scaling.
- Speed - World-class solutions have the power to help companies create new service offerings and accelerate time to ROI.
- Savings - Customers enjoy significant savings in capex and opex, flexible deployment models, and investment protection.
NetNumber and Virgin Mobile MEA
“We're very proud of our partnership with Virgin Mobile MEA as they've taken the concept of the InterGENerational platform into their regional network strategy,” commented Rosenberg. “That’s accelerated how they develop exceptional services across the Middle East and Africa region.
“We work with them hand-in-hand to deliver multiple applications onto our platform which has enabled them to provide exceptional, advanced and innovative services to their customers across the Middle East, who demand high quality services.
“What they've really taken advantage of is scale. What I mean by that is they are putting multiple generations of applications and services onto the same platform and distributing that data across their network. That has resulted in an advantageous position of time to market and operational savings.
“Rather than having different applications for many different vendors that cause operational chaos, they've been able to consolidate that and reduce their operating costs by having everything on one common architecture. We’ve had a long-term relationship with Virgin Mobile in Saudi Arabia, and recently signed an agreement with Virgin Mobile in Kuwait.”
Rosenberg says that with these solutions, Virgin Mobile MEA can take advantage of getting to the market much quicker and faster—which is what today’s discerning customer demands.