Renewable Energy: The Strategic Choice for Energy Transition in Mining and Oil Operations

The energy transition is fundamentally reshaping the mining and oil sectors, where the imperative to adopt renewable energy has evolved beyond reputational considerations to become an economic necessity.

The energy transition is transforming the global mining and oil industries. Rising demand for strategic minerals and mounting pressure to meet environmental commitments regarding emission reduction have accelerated renewable energy adoption across both sectors.

Resource-rich nations such as Colombia and Chile face the strategic challenge of balancing economic growth with sustainable practices. Industry leaders are already responding by implementing clean technologies and executing long-term power purchase agreements (PPAs) to ensure operational stability and maintain competitive positioning. In Colombia, several mining companies have initiated clean energy procurement, while Ecopetrol, Colombia’s national oil company, is pursuing a parallel strategy, aiming to integrate 900 MW of renewable energy capacity domestically. In Chile, Grupo CAP exemplifies this trend through its landmark PPA with Atlas Renewable Energy, securing 450 GWh of renewable electricity annually and reinforcing its commitment to sustainable operations.

The Strategic Benefits of Energy Transition for Mining and Oil

According to World Bank projections, production of minerals critical to the energy transition could increase by as much as 500% by 2050. Key examples include:

– Lithium, cobalt, and nickel – essential components for energy storage batteries and electric vehicles.

– Copper – a single wind turbine requires 4.7 tons of copper, while an electric vehicle utilizes 89 kg, nearly four times more than an internal combustion engine. Goldman Sachs estimates that copper demand could surge by 600% by 2030.

For the oil sector, despite downward revisions in growth forecasts, the EIA projects global oil demand to increase by 1.3 million barrels per day in 2025.

As extractive markets evolve, the adoption of sustainable practices and the integration of renewable energy enable companies to enhance their market positioning and competitiveness, reduce operational costs, strengthen their corporate reputation, and achieve sustainability objectives.

Operational Cost Reduction

The utilization of renewable energy reduces companies’ dependence on fossil fuels and mitigates exposure to price volatility.

In Colombia, for instance, the El Niño weather phenomenon has reduced reservoir water levels, necessitating costly thermal generation and driving electricity prices upward in 2024. In December, the average price on the Energy Exchange reached COP 759.54/kWh (USD 0.18/kWh), representing a year-over-year increase of 13.47%.

This price volatility significantly impacts mining and oil companies, whose operations are highly energy-intensive. Rising energy costs can erode profit margins and compromise competitive positioning. Energy price fluctuations can materially affect profitability and strategic investment decisions in these sectors.

Renewables offer a more stable and cost-effective alternative to traditional energy sources. According to IRENA, the levelized cost of electricity (LCOE) from renewables has declined substantially over the past decade. In 2024, global average LCOEs were USD 0.043/kWh for solar PV and USD 0.033/kWh for onshore wind, both well below the international average cost of fossil fuel generation and significantly cheaper than recent spot electricity prices.

Achieving Sustainability Objectives

Mining and oil companies are establishing firm commitments to reduce greenhouse gas emissions and improve energy efficiency. Anglo American, for example, has committed to achieving carbon neutrality across all operations by 2040, with an interim target of reducing GHG emissions by 30% by 2030.

The company also aims to reduce Scope 3 emissions (indirect emissions) across its value chain by 50% by 2040.

In the oil sector, during COP28 in December 2023, more than 50 oil companies pledged to achieve net-zero operations by 2050. This includes eliminating routine gas flaring by 2030 and reducing methane emissions—an extremely potent greenhouse gas—to near zero.

These initiatives reflect a global transformation within extractive industries toward alignment with international climate objectives, supported by strategies focused on sustainability and environmental stewardship.

Reputation and Social License to Operate

Operations that integrate renewable energy are more likely to secure support from local communities and governments, thereby enhancing their long-term viability. In Ecuador, the Inter-American Development Bank has promoted mining and oil projects that incorporate clean technologies and environmental mitigation strategies, thereby improving the public’s perception of the sector.

Mining’s Commitment to Clean Energy

Chile—Latin America’s premier mining economy and the world’s leading copper producer (accounting for 24% of global output in 2023)—has increasingly adopted sustainable mining practices through the integration of renewable energy. Companies are executing long-term PPAs with solar and wind energy providers.

One notable example is Atlas Renewable Energy’s historic agreement with Codelco to supply 375 GWh per year over 15 years, beginning in 2026. The project incorporates integrated battery storage alongside solar generation. Similarly, Atlas executed a 450 GWh per year PPA with Grupo CAP, one of Chile’s largest mining and steel conglomerates. This contract involves developing a solar project in the Atacama region with battery storage capability.

Atlas Renewable Energy’s PPA expertise dates back to 2015, when it executed a contract with Minera Los Pelambres—one of Chile’s largest copper mines, operated by Antofagasta Minerals. Under this agreement, Atlas supplies clean electricity from its Javiera solar plant, which generates approximately 161 GWh per year. This track record underpins the credibility of the company’s more recent contracts and reinforces its commitment to advancing the energy transition within the mining industry.

Colombia represents another major Latin American mining economy, where mining accounts for 24.31% of the country’s national exports and generates a substantial portion of its fiscal revenues.

Despite its economic importance, mining has traditionally been an energy-intensive and environmentally burdensome process. The sustainability imperative has encouraged the adoption of clean energy, including the deployment of solar panels in remote operations and the use of electric vehicles for handling and transportation. Nevertheless, considerable opportunity remains to expand into PPAs to ensure competitive and predictable energy pricing.

Oil Companies Also Embrace Renewables

The shift to clean energy has gained momentum over the past decade, with global investment in clean energy rising by 40% since 2020, according to the IEA. Major oil companies are implementing strategies to reduce emissions and diversify their energy portfolios.

Global players, such as Shell, have committed to reducing their operational emissions. The company has pledged to halve its GHG output by 2030 versus 2016 levels—a goal it has already achieved by approximately 60%. Between 2023 and 2025, Shell is investing USD 10–15 billion in low-carbon energy solutions.

In Latin America, Petrobras has adopted a similar stance. In its 2024–2028 strategic plan, the company allocated approximately 11% of its USD 102 billion budget to low-carbon projects, with a focus on developing wind and solar power.

Colombia’s Ecopetrol is also pursuing a renewable trajectory. In 2021, the company committed to achieving net-zero carbon emissions by 2050, with a target of a 25% reduction by 2030 compared to 2019 levels. Its roadmap includes incorporating 1,000 MW of non-conventional renewable energy by 2030.

Conclusion: Standards, PPAs, and the Role of Mining and Oil in the Energy Transition

Mining and oil companies are transitioning toward more sustainable energy models. The adoption of renewable energy is no longer solely about regulatory compliance—it now ensures operational stability, cost reduction, and long-term competitive advantages.

Key data supporting this transformation:

– The extractive industry is evolving toward a more sustainable business model.

– Renewable energy is now more cost-competitive than fossil fuels.

– Industry leaders have already adopted PPAs and sustainability strategies, securing long-term cost efficiency and energy reliability.

Early adopters will not only meet their sustainability commitments but also build more profitable and resilient business models.

At Atlas Renewable Energy, we have a WhatsApp channel ready to assist you. Through it, you can get quick answers to your questions. Contact us and discover how easy it is to connect with us!

This article was created in partnership with Castleberry Media. At Castleberry Media, we are dedicated to environmental sustainability. By purchasing carbon certificates for tree planting, we actively combat deforestation and offset our CO₂ emissions threefold.