Solar became a high-profile and compelling renewable energy technology in recent years, and had arrived at 713GW in global installed capacity in 2020, which is almost a tenfold growth compared to 73GW in 2011. Now that the demand is constantly ascending, the supply of the relevant raw materials should be placed under close observation. The new report of the International Energy Agency (IEA) also emphasizes the dependency of the solar industry on copper, especially with the copper processing industry from China.
The emergence of electric vehicles and the amplified demand for lithium battery energy storage plants have resulted in a constant rise of lithium, cobalt, and nickel, and the ascension in solar installed capacity has also actuated an indirect growth in copper demand. As pointed out by the research, solar power plants require more than two times the amount of copper than coal-fired power plants primarily owing to how the conductivity and thermal conduction of copper is merely behind silver, but at a much more affordable cost, and the particular material can be extensively applied on various cables.
The report of IEA predicts that the astonishing development speed of solar energy will also generate a surging demand for grid infrastructures by 2040, including 1% of copper for solar panels and 40% (used for inverters) for rooftop solar systems, and the demand for copper may surge from 350kt to 990kt. The demand will be increased to 880kt/year under a conservative prediction.
A continuous progress in energy transformation requires a smooth supply of mineral products, though IEA believes that there are other potential bottlenecks by commenting that roughly 30% of the current copper is excavated in Chile, where Peru, China, and Congo are also critical countries in copper provision. The investment in copper has been growing steadily since 2010, and the figure in 2021 had merely reduced from US$18 billion in 2019 to US$12 billion. New mines are planned in Congo, Indonesia, and the US to provide diversified supply sources.
IEA pointed out that additional production investment is essential in order to satisfy the anticipated demand since it takes about 17 years in the average time of incorporation from mine discovery to mine output. However, the reduction in the quality of ore, and the exhaustion in equipment, are starting to restrict the potential of mines that are currently excavated.
In addition, diversity needs to be seen in back-end processing, apart from the source of mineral products. IEA commented that refining on mineral products is still dependent on China even with a sufficient level of production volume, and the position of China cannot be replaced by Congo and Mongolia.
The previous report of IEA also pointed out that energy transformation has been constantly elevating the demand for mineral products, especially with critical rare-earth elements such as nickel, cobalt, lithium, and copper, and the drastic increase in mineral prices may slow down the development of green energy.
(Cover photo source: Flickr/Bureau of Land Management CC BY 2.0)