The transition to clean energies is based on the disappearance of fossil fuels and the decarbonization of the planet. However, not all are advantages, since green energies require a notable increase in certain raw materials.
Traditional hydrocarbons are essential today, but the climate crisis and global warming have made administrations and organizations embark on a race to decarbonize the planet.
The campaign for renewable energies and the electric car champions a movement that affects all areas, but especially energy generation systems, industry and transport. What happens is that not everything is advantages. It is not about turning an apocalyptic situation into a planetary Eden.
minerals and rare earths
The industry of the new era knows very well that renewable energies and electric mobility entail challenges beyond achieving a performance comparable to that of fossil fuels.
We talk about the extraction and production of minerals and rare earths (elements very difficult to find in pure form, such as scandium, cerium or neomidium) needed as raw material. Not surprisingly, solar PV plants, wind farms, and electric vehicles generally require more minerals to build than their fossil fuel-based counterparts.
“Total demand increases significantly over the next two decades to more than 40% for copper and rare earth elements, 60-70% for nickel and cobalt, and almost 90% for lithium”
A typical electric car requires six times more minerals than a conventional car and an onshore wind plant requires nine times more mineral resources than a gas-fired plant, to give two examples.
In fact, the boom experienced by renewable energies and plug-in vehicles in the last decade has led to a 50% increase in the demand for minerals.
It is no accident that researchers and scientists around the world are working to reduce the need for minerals and rare earths to make batteries, as well as more efficient methods of recycling.
But as long as today’s batteries don’t have a viable large-scale alternative, lithium, nickel, cobalt, manganese and graphite they are crucial for battery performance, longevity and energy density.
Furthermore, rare earths are essential for making permanent magnets for electric motors and wind turbines. Equally, silver, silicon and copper are highly demanded in photovoltaic solar energy.
Electric networks, for their part, need a large amount of copper and aluminum, copper being the cornerstone of all technologies related to electricity.
According to a report from the International Energy Agency (IAE for its acronym in English), until the mid-2010s, for most minerals, the energy sector represented a small part of the total demand.
However, as energy transitions accelerate, clean energy technologies are becoming the fastest growing demand segment. “In a scenario that meets the goals of the Paris Agreement, its share of total demand increases significantly over the next two decades. to more than 40% for copper and rare earth elements, 60-70% for nickel and cobalt, and almost 90% for lithium».
Prices and guarantee of supply
In today’s world still driven mostly by fossil fuels, the main challenges are controlling price peaks and guaranteeing the supply of hydrocarbons. But the transition to green energy is also not exempt from these challenges and complexities that administrations cannot ignore.
The IAE states that the world is on track to double the demand for minerals for the production of clean energy technologies by 2040. Not only that, but “a concerted effort to achieve the goals of the Paris Agreement (climate stabilization at “a global temperature rise well below 2°C”) would mean a fourfold increase in mineral requirements for clean energy technologies by 2040. To reach net zero globally by 2050, six times more mineral inputs would be needed in 2040 than today.
To be a little more specific, the demand for minerals for use in electric cars and batteries will multiply by 30, with a 40-fold increase for lithium. The demand for graphite, cobalt and nickel will be 25 times higher.
Scaling up low-carbon power generation to meet climate goals also means triple the demand for minerals from this sector by 2040. Wind power takes the lead, bolstered by material-intensive offshore wind power.
Solar PV is close behind, due to the sheer volume of capacity being added. Hydropower, biomass, and nuclear power make only minor contributions due to their comparatively low mineral requirements.
In other sectors, the rapid growth of hydrogen as an energy carrier underpins strong growth in demand for nickel and zirconium for electrolysers, and for platinum group metals for fuel cells.
The mineral supply problem has already manifested itself in the past and the answers to the problems have arrived with a time lag and have caused volatile prices. This, moreover, crucially influences production costs of many technologies related to the energy transition.
If we talk about electric cars, the cost of raw materials is increasing and currently represents between 50% and 70% of the total batteries. Meanwhile, “current supply and investment planning is geared towards a world of more gradual and insufficient action on climate change,” says IAE.
“It is not prepared to withstand accelerated energy transitions. While there are a large number of projects in various stages of development, there are many vulnerabilities that can increase the possibility of market tightness and increased price volatility”.
These vulnerabilities are, among others, a high geographic concentration of production, to a much greater extent than in the case of oil or natural gas. An example is the production of cobalt and rare earths, which depends on the Congo and China by 70% and 60% respectively.
“The level of concentration is even higher for processing operations, where China has a strong presence in all areas”, explains the IAE. “China’s share in refining is around 35% for nickel, 50% to 70% for lithium and cobalt, and almost 90% for rare earth elements.
Long project development lead times also pose a threat to price and supply stability. According to IAE, it takes an average of 16.5 years to move mining projects from discovery to first production.
Reductions of 40-50% in the use of silver and silicon in solar cells over the last decade have enabled a dramatic increase in solar PV deployment
The progressive loss of quality of resources is also not negligible, since obtaining high-purity raw material requires more energy and production costs, as well as greenhouse gas emissions and waste resulting from extraction.
The greater exposure to climate risks in recent years also has its influence. For example, copper and lithium are particularly vulnerable to water stress due to its high water requirements.
And the fact that more than 50% of current lithium and copper production is concentrated in areas with high levels of water stress such as various regions of Australia, China and the African continent -many of them also vulnerable to extreme heat or flooding- , poses greater challenges to ensure reliable and sustainable supplies.
Rapid and orderly transition, innovation and recycling
All these problems have a solution, but for it to arrive in time to meet the climate goals set, it is essential to make progress in various fields.
The main one is the elaboration of a quick and orderly transition planwhich requires strong growth in investment and mineral supply to keep pace with growth in demand.
“The most important thing is to provide clear and strong signals about energy transitions. If companies do not have confidence in the climate policies of the countriesthey are likely to make investment decisions based on much more conservative expectations.
“The diversification of the offer is also crucial. Resource-owning governments can support the development of new projects by strengthening national geological surveys, simplifying permitting procedures to shorten delivery times.”
Another crucial aspect is innovation and recycling of the materials. In this way, it will be possible to considerably reduce the demand for minerals and rare materials, as well as to replace these materials with others.
For example, 40-50% reductions in the use of silver and silicon in solar cells over the last decade have enabled a dramatic increase in the deployment of solar photovoltaics.
“Innovation in production technologies can also unlock important new supplies. Emerging technologies, such as direct lithium extraction or enhanced metal recovery from waste streams or low-grade ores, offer the potential for a step change in future supply volumes.
For his part, the recycling relieves pressure on the primary supply. For bulk metals, recycling practices are well established, but this is not yet the case for many energy transition metals, such as lithium and rare earth elements.
“Emerging waste streams from clean energy technologies (eg batteries, wind turbines) may change this picture. The number of spent electric car batteries reaching the end of their first life is expected to increase after 2030at a time of continued rapid growth in the demand for minerals,” warns the International Energy Agency.
“Recycling would not eliminate the need for ongoing investments in new supply to meet climate goals, but we estimate that, by 2040, the recycled amounts of copper, lithium, nickel and cobalt from used batteries could reduce the combined primary supply requirements for these minerals by around 10%»he concludes.
There is no doubt: all the actors involved in the energy transition have a lot of work to do if they want it to be viable in the long term. But, above all, if they want it to happen within the established deadlines. Will they be up to the task?
Font: IAE