NZ's transition to a net zero carbon economy requires much more renewable electricity generation – new modelling shows that by 2040 NZ will need to invest around half a billion dollars in the metals for wind turbines alone, and even more for solar power.
Analysis: We all (most of us, at least) appreciate the importance of reducing our energy consumption and changing our energy supply to shift away from fossil fuels. For that reason, the government has set an aspirational goal of reaching 100 percent renewable electricity generation by 2030, although there are some questions as to whether, indeed, we can reach it.
The International Energy Agency’s flagship report of May 2021 highlights another important aspect of this clean energy transition that is often not widely acknowledged, namely what it means for our dependence on metals—such as copper, nickel, rare earth elements, and numerous others—that are crucial to renewable energy technology.
Given current and projected mining and mineral processing operations, we may find we become rather dependent on developing countries for our clean energy transition—and this raises many intricate geopolitical issues.
Rare earth elements are a case in point. From a global distribution perspective, they are not so rare. China has, however, gained a near monopoly on global supply by controlling the processing steps of extracting the elements from mined rocks. The global supply risk became evident in 2010 when China temporarily halted exports with subsequent price turmoil.
Copper is another example of a metal with massive projected growth in demand. Chile and Peru are the world’s top copper producers. Mining wealth, and who controls it, generates hot debate in both countries. Recent political uncertainties, coupled with a growing appetite for the metal, contributed to record-high prices for copper earlier this year.
Modelling the transition
To explore what the clean energy transition means for electricity generation and metals use in Aotearoa New Zealand, we modelled the potential uptake of solar photovoltaic (PV) and wind power. Our work built on modelling that’s been done by various agencies—the Climate Change Commission, Transpower, the Energy Efficiency and Conservation Authority, and the BusinessNZ Energy Council to name a few.
Their scenarios mostly considered incremental changes in the market—in terms of supply and demand—with different outcomes regarding the future uptake of generation technologies. Modelling uptake is tricky. Solar PV growth, for instance, has consistently outpaced worldwide projections, as an Oxford University paper has shown.
Our modelling focused on power generation capacity (the maximum output under ideal conditions) as opposed to annual energy generation (what’s produced under real-world conditions).
Recycling and responsible mineral sourcing are obviously critical to future supply. There is increasing pressure on the energy industry to improve transparency and reporting on sustainability issues in supply chains, but this will remain an enormous challenge.
or hydropower, geothermal and other generation used to firm up supply, we incorporated the most optimistic uptakes from the previously modelled scenarios. Based on current trends, we assumed the uptake of utility-scale (large) and distributed (small) solar PV technologies, as well as wind at utility-scale (on- and off-shore), would follow a more aggressive growth path. We also assumed fossil-fuel generators were ‘forced’ to exit before 2035.
Our results show a potential overshoot of generation capacity, compared with the upper forecasted capacity on the national grid from previously modelled scenarios. That’s not surprising: because of the variability of renewable generation, we’ll need more capacity with storage. There’s no certainty on how this will play out, including whether we’ll pursue building a 5 GWh-plus pumped hydro scheme at Lake Onslow, one of the options the NZ Battery Project is investigating.
Our reliance on metals
The results have interesting implications for our future reliance on certain metals.
In terms of physical quantities, in the case of wind power we’ll need much more zinc, copper and aluminium in the system. For solar PV, silicon will also be crucial. This is just for the generation technology and excludes other construction materials such as steel.
In terms of dollar investment (based on current global prices), chrome, nickel, and silver become critical, as do molybdenum, neodymium, and dysprosium for wind generation capacity. The latter rare earth elements are mostly associated with magnets used in the turbines. Our modelling estimates that by 2040 we will need to invest around half a billion dollars in these metals—just for on- and off-shore wind farms.
It’s worth noting this is only considering generation; upgrading our network infrastructure to move around all this extra electricity will require even more metals—such as aluminium and copper for power lines, and, again, steel for supporting structures.
Recycling and responsible mineral sourcing are obviously critical to future supply. There is increasing pressure on the energy industry to improve transparency and reporting on sustainability issues in supply chains, but this will remain an enormous challenge.
A collective, global effort is required to plan ahead to ensure the sustainable – as well as the ethical and equitable – supply of the metals we’ll rely on for the clean energy transition.
