A SERIES ON HOW TO DO RENEWABLES RIGHT

The current energy crisis together with the new political approaches to reach climate targets give energies an incredible relevance. It is predicted that by 2026 renewable electricity capacity will be 60% above 2020 levels, giving it a competitive advantage over fossil fuel and nuclear combined. In addition, the new geopolitical paradigm is forcing countries to look for non-export dependent alternatives. The development of renewable energies is becoming more important than ever.

Although fossil fuels account for more than 80% of global energy production, renewables open the way to diversification and energy security. So, there are some factors to consider if we want this transition to be truly clean and inclusive.

One of those crucial factors is the use of critical minerals, defined as resources that are essential to the economy and whose supply may be disrupted.

Critical minerals

The type of minerals used can vary but those such as rare earth elements, lithium, nickel and cobalt, and defined under the category of critical minerals, are essential for the creation and durability of batteries, turbines and EV motors. Including aluminium and copper in electrical systems. The steady expansion of the renewables market is fuelling the expansion of the minerals market. Solar photovoltaic (PV) plants, wind farms and electric vehicles (EVs) usually demand more minerals to build than their fossil fuel-based equivalents [4].

Making projections from World Bank data have been estimated the use of 34 million metric tons of copper, 40 million tons of lead, 50 million tons of zinc, 162 million tons of aluminium, and approx. 4.8 billion tons of iron.This raises new issues that need to be addressed.

The extraction of these elements can be very disruptive to communities and supply chains depending on the conditions and contexts under which they are extracted. A worrying factor is the increasing regionalization of supply chains, since most of these minerals are located in regions such as Africa, Latin America or Asia, which have already been targets in the past for their abundance of mineral resources such as cobalt, diamonds, gold and silver in past centuries.

When a resource is scarce, the supply of that resource can be affected. The above is closely linked to this point. Conflict and political instability in developing countries to control supply can lead to supply chain disruptions. The problem of competition for the control of resources can also lead to risks in the supply. Currently, there are clear examples of monopolies such as China’s with rare earth metals, which allows it to control the market and supply, something it has already done in the past cutting the exports with Japan or the United States, and which can have detrimental effects if we consider the importance of these minerals.

Another problem that could be mentioned is that of prices. They tend to fluctuate with the ups and downs of the market, but what some authors point out is the possibility that prices may increase because of the rapid growth in demand, closely linked to the energy transition, and the scarcity of minerals.

An additional controversial issue in the green or clean transition debate is the carbon emissions produced by the extraction of these minerals. But the truth is that with the innovation of technology there are ways to minimise this impact by moving towards low-carbon electricity and efficiency improvements. Including, of course, a proper approach to best practices.

Solutions

For every problem there is a solution, so how can be critical minerals and renewables merged to be truly clean and inclusive?

Some of the answers seem to rely on efficiency, substitution and recycling, diversify supply sources and overall and a better governance of minerals, which includes a human rights-based approach.

Efficiency can refer to different aspects, including R+D programmes in charge of redesigning and improve the products and materials used. For example, replacing the use of permanent magnets in wind turbines or electric cars or remodelling batteries using lithium to substantially lessen their requirements.

The substitution of critical minerals would also be seen as part of the efficiency. An example would lie on substitutes for the silver used in solar photovoltaic (PV) or rare earth elements in magnets, along with the recycling of materials created from these minerals, removing in this way the pressure on the primary supply. The main drawback is that this is not possible for all minerals or materials, but IEA estimates that recycling copper, lithium, nickel and cobalt from spent batteries could reduce combined primary supply requirements for these minerals by around 10%. Yet, all this requires investment in both economic and human resources.

Supply diversification would mitigate the monopolistic effect of some countries on certain minerals and would also provide greater energy security. However, certain problems, such as national, developers and local interests may crash hampering the process. For that reason, dialogue is required as well as greater governance over minerals, where policy makers play a vital role. By enforcing climate policies, companies will realise that more sustainable ways of extracting these minerals are necessary if they want to do business in such countries. Likewise, by promoting clear policies and transparent licensing processes and raising public awareness, such challenges can be avoided.

Companies also have a responsibility to the protection of human rights, an aspect that will boost greater social acceptability, ESG performance and local welfare indicators improvements. Mineral extraction projects for renewable energy must never lead to a worsening of the living conditions of the local population. For this, the human right-based approach must always be present.

Conclusion

As has been said, any transition and new paradigm requires research and effort. Despite the aforementioned obstacles, renewables have proven to be more than vital and indispensable if climate targets are to be reached. Moreover, further alternatives for community inclusion and ownership are being offered by renewables in comparison to their fossil energies counterparts, thus democratising a transition that must include everyone.

Written by:  Silvia Garcés

Sources

[1] American Geosciences Institute (AGI) Critical Mineral Basics. Link.

[2] Dominish, E., Florin, N. and Teske, S., (2019). Responsible Minerals Sourcing for Renewable Energy. Report prepared for Earthworks by the Institute for Sustainable Futures, University of Technology Sydney. Link.

[3] Gielen, D. (2021). Technical paper: Critical materials for the energy transition. International Renewable Energy Agency (IRENA). Link.

[4] International energy Agency (IEA) (2022). The Role of Critical Minerals in Clean Energy Transitions. World Energy Outlook Report. Link.

[5] European Environment Agency (2021). Emerging waste streams: Opportunities and challenges of the clean-energy transition from a circular economy perspective. Link.

[6] Australian government – Geoscience Australia. Critical Minerals at Geoscience Australia. Link.

[7] Sahla, S. (2022). Why critical minerals governance matters in the transition to “net zero”. Extractives Industries Transparency Initiative (EITI). Link.

[8] Extractives Industries Transparency Initiative (EITI) (2022). Making the grade: Strengthening governance of critical minerals. Policy brief. Link.