A strategy to increase the resource efficiency of renewable energy technologies

Introduction

The Paris Agreement, which was negotiated during the 21st Conference of the Parties (COP 21) in 2015, obliges all involved nations to accelerate and strengthen their activities in combating climate change. The main goal of the Paris Agreement is to maintain the global temperature rise below 2 °C while pursuing efforts to limit the rise to 1.5 °C. Within this context, the involved nations are required to outline their climate goals and actions which will collectively contribute to achieving the agreed climate goals. As an example, the climate goals in Germany aim at reducing the greenhouse gas (GHG) emissions by at least 80% compared to the reference emission values from 1990. By the end of 2017, the total GHG emissions in Germany have reduced by 27%. The realisation of these climate goals clearly requires a shift in the electricity production sector from the GHG-intensive conventional power plants towards GHG-free generators. The renewable energy technologies photovoltaics (PV) and wind turbines are among the most competitive electricity generating technologies, can be installed quickly in both centralised and decentralised manner and offer further declining installation costs. The expected increase in the installation of renewable energy technologies opens up the following question: Are there enough raw materials to cater to the increasing demand for renewable energy technologies in the future? In this chapter, the possibility of a raw material supply risk due to the increased deployment of PV and wind turbines will be presented using the example of a global energy transition scenario. In addition to that, ways to increase the resource efficiency of renewable energy technologies will also be discussed.

Energy transformation process and potential demand for raw materials

Energy scenarios are not predictions of how the future energy system will be, but they assist the energy transformation process by providing guidance and presenting possible risks that can occur while pursuing climate goals. The International Energy Agency (IEA) publishes the World Energy Outlook

A strategy to increase resource efficiency 173 (WEO) ever}' year which provides an update on the global energy market and the projections of the energy system based on current trends and data. In the latest version of the WEO, three energy scenarios were presented, among which the Sustainable Development Scenario (SDS) is considered to be the most sustainable scenario (IEA 2018). The SDS scenario considers the broader energy picture taking into account the United Nations Sustainable Development Goals (SDGs) on energy, universal energy access, air pollution, clean water and sanitation. According to this scenario, the global energy-related CO2 emissions will peak at around 2020 and will continuously decline thereafter. The IEA claims that the scenario is fully in line with the trajectory required to achieve a global temperature rise of between 1.7 to 1.8 °C by 2100.

According to this scenario, the global cumulative installed capacity of PV and wind turbines will reach 4240 GW and 2819 GW respectively by 2040. By the end of 2018, a total of 532 GW (PV) and 590 GW (wind) capacities are available globally (IRENA 2019). The expected massive expansion of PV and wind turbines is however conditioned to the supply of large raw material amounts. As an example, the requirements of selected metals are shown in Table 15.1. The demand includes new capacities that have to be installed to substitute older power plants that have reached their lifespan to achieve the proposed cumulative installed capacity in 2040. Furthermore, an annual reduction of 1% is considered for the specific material demand to take material efficiency measures into accounts, such as improvement in the manufacturing process and power conversion efficiencies.

There are several important points that can be understood from the results. Firstly, increasing demand for renewable energy technologies will eventually exhaust the reserve of relevant metals. If the SDS scenario is realised, approximately 13% of available silver reserves would have been mined and manufactured into PV modules by 2040. Although the use of rare earth elements (REEs) in wind turbines does not seem as critical as silver in PV, it should be mentioned that the installations of these technologies will not be ceased in 2040. Instead, the installations will continue beyond that at an even greater rate to reach the long-term climate goals. Secondly, the expansion of renewable energy technologies will most likely be constraint by the production capacity of raw materials, since the growth in annual demand by far outweighs the current production rate. In terms of dysprosium, the production has to be increased by more than 250% of today’s level.

Thirdly, renewable energy technologies can expect tough competition from other sectors in securing raw materials for the future. Regarding silver, for instance, only 8% of the current global silver demand goes into manufacturing crystalline Silicon (c-Si) based PV modules, which dominate the global PV market with a share of over 95% per cent. Therefore, a twofold increase of the silver demand required for PV module can create tough competition among other silver-intensive sectors. With the exception of the financial crisis in 2011, the global GDP growth has been positive other the past 50 years.

Table 15.1 Maximum annual and cumulative material demand of selected metals in PV and wind turbines for the Sustainable Development Scenario in WEO 2018

Metal

Specific metal demand [kg/MW]

Maximum annual material demand [kt]

Global production in 2018 [kt]

Percentage of demand to production [%]

Cumulative material demand 2020-2040 [kt]

Reserve

2018 [kt]

Percentage of demand to reserve [%]

PV

Ag

23

4.6

27

17

72.6

560

13

Wind

Nd

90

13.6

19

71

170.4

23000

0.7

turbine

Dy

7

1.1

0.42

251

13.3

320

4

Sources: The specific metal demand for Nd and Dy are obtained from Shammugam et al. (2019) whereas the specific demand for Ag is obtained from Fraunhofer internal data. USGS (2018) and Viebahn et al. (2015) provided die reserve and annual production of Ag and REEs respectively.

Assuming that this trend continues in the future, growth in all manufacturing sectors can be expected, which consequently creates competition for raw materials between different sectors. In most cases the outcome is predictable; those who are willing to pay the most can secure the raw materials they need.

Apart from the aforementioned arguments, there are several other risks that can occur due to the increasing deployment of renewable energy technologies. One of the most likely ones will be the hike in raw material prices as the availability becomes scarce. Being already the most expensive metal in c-Si PV modules, a strong increase in silver price will definitely hinder the cost reduction of PV modules, which in turn will impede a large-scale deployment. Furthermore, the increase in price might provide producing countries with useful leverage against other countries to increase their profit. This is possible since most of the metals required by renewable energy technologies are found in large concentrations in only a handful of countries. An example of this was the export restriction on REEs imposed by China in 2012, which eventually led Vestas, a major turbine manufacturer, to use squirrel cage induction generators for their turbines instead of their established high-speed generators with permanent magnets.

 
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