How might you begin to account for the high costs of decarbonizing global energy systems? Eco-Rental Solutions, provider of environmental testing equipment and instrumentation shares their insights.
Companies, conglomerates, and even entire governments continue to set goals to expand solar, wind, and battery technologies as a means to power society, while phasing out traditional carbon-based power sources like coal or natural gas. But what most policy formulations miss is the significant impact that the scale of materials demand will have on prices and commodities markets.
Right now, fossil fuels supply about 80% of all energy. And the International Energy Agency (IEA) hopes to have solar and wind energy providing nearly 60% of the global energy supply over the next two decades. We must ask ourselves: What kind of costs will that require?
How Costly is Sustainable Energy?
Building solar or wind systems requires around a tenfold increase in the amount of common materials used to build them – things like concrete, steel, and glass – as is used for building a natural gas power plant. And supplying the same quantity of energy from these systems requires a very large increase in the use of specialty minerals and metals like nickel, cobalt, zinc, and copper. The same kind of trend can be seen for batteries; although electric vehicles comprise only 5% of the automobile industry at this time, the price index of EV battery metals has increased by more than 200% over the past few years, according to mining.org.
What Are the Challenges Aside from Cost?
Realigning energy material supply chains has impacts beyond cost. The U.S. is already 100% dependent on imports for many critical minerals. So, assembling solar, wind, or battery energy equipment in the U.S. won’t change the dependency if the key materials are still imported. There are also societal and moral implications; increased mining for minerals will require expansion into high-biodiversity areas that have remained undisturbed by humans. And the mining itself will often need to occur in fragile ecosystems and emerging markets, which brings up humanitarian concerns.
What Can Be Done?
Is all of this to say that economies should not focus on transitioning to more sustainable energy systems? No. But it’s important to be realistic about the implications, and the timeline. So, what can policymakers do?
The first step could be adopting more moderate and longer-term targets for solar, wind, and battery energy sources. This will avoid triggering hyper-inflation in commodity markets. Additionally, those in charge should realize that a “net-zero” goal will require new technology that doesn’t exist right now – investing toward that end may be a smart decision.