The current global energy system is both unsustainable and inequitable, and large changes are required quite rapidly if there is to be any chance of limiting the effects of global warming. The global community has agreed on sustainable development goals attempting to integrate and balance the three dimensions of economic, social, and environmental sustainability. One of the goals is to ensure access to affordable, reliable, sustainable, and modern energy for everyone.
The energy technologies utilizing renewable primary energy sources require materials to be constructed, most of which are based on non-renewable resources. Specifically, even though solar and wind technologies produce renewable energy, the materials used in the construction of every solar panel and wind turbine are not necessarily sustainable in and of themselves, nor are the industries involved in their construction. Commissioning these technologies also requires energy that in the current energy system will likely come mainly from fossil fuels.
Renewable or low-carbon energy can be argued to be a means to improve energy security, but it also depend on the availability of critical materials. The variable nature of the electrical energy generation from wind and solar could also require large amounts of technologies to handle these variations, such as energy storage, which also requires materials and energy.
The commissioning of low-carbon technologies on the scale required to reach and sustain a low-carbon energy system in coming decades requires significant quantities of both bulk materials and scarcer resources. Wind turbines, solar panels and electric cars all require rare earth elements and other minerals for production. While some of these elements are found in Europe, most of the critical raw materials used in digital and clean technologies are sourced from outside the EU, notably rare earth metals.
The sustainable growth of renewable energies depend on the availability of key materials, for example Lithium is the key limiting resource for most batteries – while rare earth metals, in particular “lanthanides” such as neodymium, are required for the magnets in wind turbine generators.
It is impossible to say with certainty what the future lithium production and demand will be, but the results indicate that it is possible, not to say likely, that there will be issues with lithium availability for a rapid expansion of EVs, given that they rely on lithium-ion batteries. The authors assume Lithium requirements to be 1.4 kg for PHEV and 4 kg for an EV. To limit these potential issues, alternative battery technologies and efficient recycling systems need to be developed
Copper is the conductor of choice for wind power, being used in the generator windings, power cables, transformers and inverters. Commissioning wind power at a multi-TW level requires significant quantities of bulk materials such as steel and copper production. “However, even in the growth patterns with the highest annual installations, the requirements are still well below the current production levels of these materials, according to author.”
According to Alex King, director of the new Critical Materials Institute, every wind farm has a few turbines standing idle because their fragile gearboxes have broken down. They can be fixed, of course, but that takes time – and meanwhile wind power isn’t being gathered. Now you can make a more reliable wind turbine that doesn’t need a gearbox at all, King points out, but you need a truckload of so-called “rare earth” metals to do it, and there simply isn’t the supply.
Three currently commercial PV technologies are modelled individually in two different market cases, one crystalline silicon (c-Si) case and one thin film (TF) case. In the c-Si case, all future PV growth is assumed to come from currently dominating c-Si technologies. In the TF case the future growth is assumed to come from the currently commercial thin film (TF) technologies CIGS and CdTe.
In order to reach the PV capacity in the c-Si case, annual production of solar grade silicon must be scaled up to several times the current level, unless silicon intensity decreases significantly. The annual requirements of silver correspond to significant parts of, but are still far under, the current silver production. Eliminating the use of silver and decreasing the silicon requirements for c-Si technology appears like sound strategies to enable continued fast growth and decreasing costs of this technology.
For some technologies, such as thin film solar cells and electric vehicles with lithium-ion batteries, availability of materials could become an issue for potential growth rates. Future phosphate rock production could become highly dependent on few countries, and potential political, social and environmental aspects of this should be investigated in more detail.
Realizing the TF case with equal shares of CIGS and CdTe technology, requires significant quantities of indium, gallium, selenium, tellurium and cadmium. Although future availability of these materials is uncertain, indium and tellurium appear likely to become problematic for rapid growth of TF technologies. Efforts to decrease material intensity and increased production of the required resources are necessary for these technologies to reach significant levels.
We need to consider the growth rates of the industries required for rapid deployment of technology, including manufacturing the technologies, as well as extracting, refining, and recycling the required materials.
Energy geopolitics: Chinese supply of critical raw materials could pose long-term risks
The countries that hold the largest reserves of these critical materials shall become in high demand and influence future energy geopolitics. The largest reserves of quartzite (for silicon production) are found in China, the US, and Russia – but also Brazil and Norway. The US and China are also major sources of copper, although their reserves are decreasing, which has pushed Chile, Peru, Congo and Indonesia to the fore. Chile also has, by far, the largest reserves of lithium, ahead of China, Argentina and Australia. Factoring in lower-grade “resources” – which can’t yet be extracted – bumps Bolivia and the US onto the list. Finally, rare earth resources are greatest in China, Russia, Brazil – and Vietnam.
China is first out of the blocks in the global race to secure raw material supplies critical for the batteries that will power the electric vehicles of the future. China has made dominance of mineral markets a strategic priority, giving its companies government support to capture market share. From rare earth elements to key mineral inputs in lithium-ion batteries — namely lithium, cobalt, nickel and graphite — China’s control of global production and processing is unrivaled.
The biggest automakers are caught in an arms race to develop technology and supply chains needed to overhaul their gasoline and diesel fleets and roll out more electric cars over the next decade. Key to that are two huge cobalt mines run by Glencore in the Democratic Republic of Congo.
In Dec 2020, Glencore Plc, the world’s biggest supplier of cobalt, has extended its supply agreement with battery maker GEM Co., allowing the Chinese company to secure supply of the crucial metal until the end of the decade. The deal ensures GEM will have a steady supply of the battery-making ingredient until at least 2029, and further strengthens China’s growing dominance of the industry. Glencore said Thursday that it will sell 150,000 tonnes of cobalt between 2020 and 2029. It replaces a previous agreement to sell about 60,000 tonnes through 2024. In May 2018, Glencore Plc, agreed to sell about a third of its output of the metal to Chinese supplier of battery chemicals GEM Co.
China’s drive to secure other raw materials for batteries was also seen as an Australian producer said giant manufacturer Shaanxi J&R Optimum Energy Co. had begun takeover talks to control one of the world’s newest lithium mines. “It tells us once again that it is China rather than the western world who properly understands the raw material requirements and value of global vehicle electrification,” Paul Gait, an analyst at Sanford C. Bernstein Ltd. in London, said in a note. “They clearly get it; the West doesn’t seem to at the moment.”
Solar Panel Industry
A shortage of glass is raising costs and delaying production of new solar panels in China, which manufactures over 70 percent of the world’s solar panels. Prices for glass that coats photovoltaic panels have increased 71 percent since July 2020, and manufacturers are not able to produce it fast enough to keep more than a week’s worth of sales in inventory. Glass requirements have increased as the solar industry turns toward manufacturing bifacial panels, providing greater power output. Bifacial panels coat both the top and bottom with glass, allowing for an increase in power generation from sunlight reflected off the ground. Bifacial panels are expected to make up half the market in 2022—up from about 14 percent last year.
Another material needed in solar panel production is polysilicon and China has 80 percent of the world’s capacity. Raw polycrystalline silicon, commonly known as polysilicon, is a primary feedstock material used for the production of solar cells. Polysilicon feedstock generally consists of large rods which are broken into chunks or chips of various size, then cast into multicrystalline ingots. The ingot materials are subsequently sliced into silicon wafers suitable for solar cell production. In 2019, about one-third of the polysilicon used to make solar panels came from Xinjiang—the region in which China is reportedly abusing Uighurs and other Muslim minorities.
By 2021, five companies in Mainland China and Hong Kong are expected to control two-thirds of the world’s polysilicon market. One of those is Daqo New Energy Corporation, which started building polysilicon plants in Xinjiang in 2011 due to the region’s cheap electricity from coal-fired power plants. The regional power grid is operated by a division of Xinjiang Production and Construction Corps, or XPCC, which the U.S. government describes as a paramilitary organization.
Supply chain Risk to EU and US
Large scale deployment of low-carbon technologies is crucial for sustainable development and for counteracting anthropogenic climate change, but the potential growth rates of technologies, the required energy and material flows, and the availability of required resources should be considered when planning for future alternative energy systems. The criticality of materials depends on its importance to “clean” energy, and the apparent supply risk. Alternatively, the criticality of metals can be quantified using the three dimensions: supply risk, environmental implications and vulnerability to supply restrictions.
President Joe Biden’s recent executive order on supply chains calls for an immediate 100-day review of four critical sectors: pharmaceuticals, critical minerals, semiconductors and advanced batteries like those used in electric vehicles. Despite vast domestic resources, U.S. mineral import reliance has doubled in just the past two decades. And for nearly two dozen minerals and metals that the Departments of Defense and Interior have classified as critical to U.S. national and economy security, China is the dominant supplier.
U.S. solar developers are highly dependent on China for materials that are instrumental in solar panel production. Whether it be the solar panels themselves, the glass that is needed for bifacial panels, or the polysilicon for the solar cells, issues are arising dealing with cost, delays and human rights.
Europe is heavily dependent on imports of rare earths from China. China has very big and good quality resources of rare earth elements. An earlier study analysed risks to European renewable industries from the Chinese supply of critical raw materials. The offshore wind sector was found to be the most vulnerable of the renewable industries to supply risks. EU and industry strategies should be able to deal with these supply risks in the short term, but there are potential long-term risks to solar and wind sectors.
This study examined the supply of five critical raw materials: tellurium, gallium and indium (used in making solar cells), neodymium and dysprosium (used in manufacturing offshore wind turbines), all identified as at high risk for future supply due to supply being concentrated in only a few countries as well as likely increases in demand from renewable sectors.
The EU depends least on the Chinese supply of tellurium — 20% of which is sourced from China — followed by indium (58%), gallium (69%), neodymium (90%) and dysprosium (99%). Solar companies, therefore, have lower potential supply risks, as there are alternative supply sources of tellurium, indium and gallium (tellurium from Japan, Belgium and Sweden; small quantities of indium from Belgium, Germany, Italy, the Netherlands and the UK; while gallium production facilities are currently being built in France) and prices for these materials are currently low. In contrast, the European wind-energy sector is dependent on the continued supply of neodymium and dysprosium — 90% and 99% imported from China respectively.
In recent years, the Chinese government has moved towards greater state control of critical raw materials. The researchers say this is partly due to the environmental and health problems associated with extracting these materials, but also to ensure a domestic supply for its own, growing renewable-energy industries. China is also concerned by the low prices they receive for these materials and has a desire to improve the competitiveness of its own renewable sectors. Consequent policies, such as the introduction of export licenses in 2015, are likely to increase the costs of raw materials for EU companies.
The EC expects demand for tellurium, gallium and indium to peak around 2020, when alternative silicon cells are likely to become more widely used in solar technology. Future efficiencies in solar-cell technology should also mean less tellurium, gallium and indium is needed in the production of solar cells. EU demand for neodymium and dysprosium is expected to rise by 2020 (to 845 tons of neodymium and 58 tons of dysprosium) and 2030 (to 1 222 tons of neodymium and 84 tons of dysprosium), respectively, due to investments in wind energy, particularly offshore wind installations. Offshore wind energy is expected to account for 30–40% of all wind energy in the EU within ten years.
EU and US strategy
The development of alternative technologies less reliant on these raw materials, and methods to recycle these materials is, therefore, a priority. In the long term, the most effective strategies to deal with uncertain supply from China are to look for alternative supply chains and to reduce the need for critical materials in renewable technologies. The EU is promoting research (e.g. Replacement and Original Magnet Engineering Options (ROMEO), Suprapower project, INNWIND.EU and EcoSwing) to develop renewable-energy technologies that do not depend on critical raw materials.
The Solar Energy Industries Association, the top U.S. trade group for the industry, is publicly encouraging companies to move their supply chains out of the region and is relaunching an initiative to raise awareness within the industry on the importance of ensuring ethical supply chains that do not include slave or forced labor.
In a bid to become less dependent on certain resource-rich countries the EU recently unveiled a critical raw materials action plan. That seeks to diversify supply while also significantly strengthening domestic sourcing, processing and recycling inside Europe. Peter Handley from the European Commission said: “The EU’s new strategy for critical raw materials presents a 10-point action plan to boost our supply of sustainable, critical raw materials. The key is diversification. So firstly, we need to source from a wider range of countries. Secondly, we need to do more with the resources we have in Europe itself. And thirdly, we need to ramp up the recovery of those raw materials that are already in the economy. We call it the ‘urban mine’.”
The researchers say the EUROPEAN study highlights the importance of looking at the renewable-energy sectors and technologies separately, as well as considering Chinese state policies, in order to understand potential supply risks of critical raw materials.
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