During the past few years, we have seen growing interest in the concept that in order to achieve “net zero” carbon emissions, all end use energy should be delivered via electricity This electrical energy can then be converted to many end use requirements without the release of greenhouse gases (GHG) at the end point. This logic has been applied to virtually every energy demand, from transportation to buildings. Possible carve outs might be some industrial applications that require large quantities of high temperature heat (steel and cement making) and long-distance air travel. These specialized demands might be met with a “green” fuel like hydrogen produced from renewable sources. The reasoning behind this approach has been that we “know” how to make carbon-free electricity via renewable energy technologies, like solar photovoltaics and wind turbines. (Some would also include nuclear power.) These electrical generation technologies are sufficiently developed that there is little associated technical risk in their expansion. And we have seen major cost reductions in the past couple of decades that should continue into the future. While leaving open some issues like industrial heat and long-distance air travel, electricity has seemed to many as a strong foundation to move aggressively against ever-growing GHG emissions.
A recent report by the International Energy Agency, The Role of Critical Minerals in Clean Energy Transitions, adds new realism to the challenges of achieving such an “all-electric” future. This detailed analysis points out that most of the technologies essential to an extensive conversion to electricity, such as photovoltaic systems, batteries, electric motors, and expanded transmission lines, will require much greater volumes of select minerals (such as lithium, nickel, manganese, cobalt, rare earths, aluminum, and copper) than required by our current, fossil-fuel intensive system. For example, an electric car requires about 5 times more of these minerals than a conventional automobile. A land-based wind turbine requires nearly 7 times more of these minerals than would a natural gas power plant of comparable output. A photovoltaic power system would require about 4 times more of these materials. Additional examples of mineral requirements for many of the key technologies are shown in the following chart from this report. (Note: In making these estimates for mineral requirements, the IEA took into account projected technology improvements that should reduce the need for some materials, such as cobalt required per kwh for batteries.)
Aggregating demand for these minerals across all the required electric technologies causes 2040 demand to increase by 42x for lithium, 21x for cobalt, 19x for nickel, and 7x for rare earths. Other minerals require similar growth, as shown in the chart below. The IEA report documents that around the world, it takes on average at least 16 years to develop a new mine. Having enough mineral supplies to achieve electrification goals will be extremely challenging.
Compounding the challenge of increasing mining and processing capacity of such materials is the fact that most of these minerals are currently sourced (mined and/or processed) from countries, such as China, Myanmar, the Democratic Republic of the Congo, Russia, and Mozambique, that many do not view as reliable trading partners around whom to build a durable, resilient next-generation energy system. Some of these countries also have less strict environmental standards than the US and other western nations, so expanding mineral extraction and processing in these locations can have negative environmental and health, and safety concerns. Experiences learned during the recent pandemic with critical medical equipment, such as PPE and ventilators, have made us all aware that a durable ecosystem/supply chain is essential to ensure social safety and security.
To further illustrate the size of this challenge, a recent article in the Wall Street Journal reports that major mining companies producing “technology metals”, such as copper, cobalt, and lithium are not currently investing enough in new production to even replace current production …. let alone increase it.
The analysis provided by the IEA essentially shows that transitioning to an all-electric energy economy is essentially replacing a fossil fuel intensive energy system with a mineral intensive one. Drilling and refining are essentially replaced by mining and processing. Some unreliable trading partners are simply replaced with others with similar concerns. There is no “get out of jail” pass to side-step these challenges.
We do not need to turn our backs on efforts to increase electrification to reduce greenhouse emissions. But we’d be wise to retain, improve and de-carbonize traditional energy supply systems at the same time we seek new options. Reading the IEA report should be considered an essential part of understanding the risks and challenges we face in pursuit of our long-term energy and environmental goals.
Jeff is the Chief Product Strategist/Co-founder of Onboard Dynamics. He is an experienced entrepreneur, having founded or co-founded two companies in the energy and software industries before co-founding Onboard Dynamics.