Recent studies undertaken with Australian underground miners have shown that a financial NPV gap continues to exist between the lifecycle costs of diesel fleets against electrified solutions. This raises critical questions: Are financial-only viewpoints obscuring opportunities to deliver long-term value? How can we properly characterise the environmental and social impacts of continuing with diesel-powered options?
We know that there are other factors at play, such as the health and environmental impacts of diesel particulate matter (DPM) emissions, nitrogen oxide emissions, maintenance hours, and heat. By ascribing credible risk cost ranges to these factors using industry data and economic valuation methods, we can understand their relative impact and make better decisions.
Results have demonstrated that incorporating these values could narrow the NPV gap between electric and diesel fleets to 1% under base case conditions. Sensitivity analysis reveals that electric fleet options could become economically superior in a majority of cases. For example, testing cases with higher future energy costs and an increasing focus on sustainability factors, electric vehicles can become superior to diesel, resulting in millions of dollars of financial and non-financial (ESG) benefit.