Energy transition faces metals shortage unless investment rises, plus other top energy stories this week

 A surge in materials demand due to the energy transition could lead to a shortage of several metals in the next decade unless investment increases.
A surge in materials demand due to the energy transition could lead to a shortage of several metals in the next decade unless investment increases.
Image: REUTERS/Claudia Morales
  • This week's round-up brings you the latest developments in the global energy sector.
  • Top energy news: Energy transition in jeopardy without metals investment; African power sector could benefit from energy aggregators; China imports record amounts of oil despite a slow economy.
  • For more on the World Economic Forum's work in the energy space, visit the Centre for Energy and Materials.

1. Energy transition in jeopardy without metals investment: Report

Shortages of metals that are critical for the energy transition could emerge in the next decade unless investment increases, according to a global group of energy producers, consumers and financial institutions.

Graphic showing estimated reserves and resources of key energy transition materials
The report concludes that there are enough mineral resources to meet future demand through to 2050, but more mining is required.
Image: SYSTEMIQ analysis for the ETC; US Geological Survey.

Significant supply gaps for lithium, nickel, graphite, cobalt, neodymium and copper are all possible, says the Energy Transitions Commission (ETC). This could result in higher prices for these metals and hinder efforts to achieve net-zero emissions by 2050.

Mines need to increase production to prevent these shortages from arising. However, large-scale mining projects can take up to 20 years to become operational, and there has been a lack of investment in exploration and output in the past decade. It will be challenging to scale up supplies to meet this rapidly rising demand, says the ETC Chair Adair Turner.

Annual capital investment in energy transition metals has averaged $45 billion over the last two decades, compared with the $70 billion required each year until 2030 to expand supply, the ETC says.

Turner adds that governments, regulators, producers and consumers need to collaborate on increasing metals recycling, improving material efficiency, investing in new mining, and implementing environmental and social standards.

Up to 6.5 billion tonnes of materials will be needed between 2022 and 2050 for the energy transition, with steel, copper and aluminium accounting for 95% of this, the ETC estimates.

Graphics showing the importance of certain materials to clean energy technology
The energy transition could require 6.5 billion tonnes of materials by 2050.
Image: Energy Transitions Commission

2. African power sector could benefit from energy aggregators

Electricity aggregators could help speed up investment in the Southern Africa Development Community (SADC) and generate cost-efficient electricity for households and businesses, a new report suggests.

Energy aggregation is when local institutions, small businesses or companies buy energy together from one or more developers. Grouping together for higher-volume purchases means they pay less per unit of electricity.

Aggregators can also serve as intermediaries for investors, taking on potential risks such as political issues, non-payment problems and negotiation challenges, according to the Accelerating Investment in Renewables Through Energy Aggregators report from the RES4Africa Foundation, in collaboration with AFRY.

This reduces capital investment costs and provides producers with reliable buyers, consumers with affordable electricity, and networks with multiple revenue sources. These benefits can positively impact the SADC electricity sector and local economies.

The report emphasizes the need for targeted actions to enhance SADC's policy and regulatory framework. This would make the region more attractive to investors and local administrations while allowing the full potential of aggregators to be realized.

Other recommended interventions include establishing transparent rules and tariffs, providing direct incentives or refunding investment costs, and implementing import tax exemptions. Efforts to increase public awareness and involve the population in these projects are also encouraged.

3. News in brief: More energy stories from around the world

China's oil imports are hitting record levels despite its weak economy. The country is looking to capitalize on cheap Russian crude to build up stockpiles and increase exports of refined oil, according to the Financial Times.

Global energy demand will rise by 23% between now and 2045, OPEC Secretary-General Haitham Al Ghais says. This shows a need for continued investment in oil, he says, adding that calls to limit new oil projects are unrealistic and unwise, although there is a need to address fossil fuel emissions.

The EU plans to revamp battery regulations after adopting a new law this month that covers the entire life cycle of batteries, from mining raw materials to recycling. Its goal is to make EU-produced batteries the greenest in the world, and all batteries must now come with a compulsory carbon footprint declaration and label.

What's the World Economic Forum doing about the transition to clean energy?

Moving to clean energy is key to combating climate change, yet in the past five years, the energy transition has stagnated.

Energy consumption and production contribute to two-thirds of global emissions, and 81% of the global energy system is still based on fossil fuels, the same percentage as 30 years ago. Plus, improvements in the energy intensity of the global economy (the amount of energy used per unit of economic activity) are slowing. In 2018 energy intensity improved by 1.2%, the slowest rate since 2010.

Effective policies, private-sector action and public-private cooperation are needed to create a more inclusive, sustainable, affordable and secure global energy system.

Benchmarking progress is essential to a successful transition. The World Economic Forum’s Energy Transition Index, which ranks 115 economies on how well they balance energy security and access with environmental sustainability and affordability, shows that the biggest challenge facing energy transition is the lack of readiness among the world’s largest emitters, including US, China, India and Russia. The 10 countries that score the highest in terms of readiness account for only 2.6% of global annual emissions.

To future-proof the global energy system, the Forum’s Shaping the Future of Energy and Materials Platform is working on initiatives including, Systemic Efficiency, Innovation and Clean Energy and the Global Battery Alliance to encourage and enable innovative energy investments, technologies and solutions.

Additionally, the Mission Possible Platform (MPP) is working to assemble public and private partners to further the industry transition to set heavy industry and mobility sectors on the pathway towards net-zero emissions. MPP is an initiative created by the World Economic Forum and the Energy Transitions Commission.

Is your organisation interested in working with the World Economic Forum? Find out more here.

Multiple Italian cities have faced power outages this month, as scorching temperatures raise energy demand. Increased use of electricity for cooling purposes overwhelmed the power grids in several cities.

A $3 billion green hydrogen project is set to be established in Western Australia in 2028, writes UK newspaper The Guardian. The project aims to use over 1 million solar panels to power electrolyzers that will produce 50,000 tonnes of green hydrogen annually.

Saudi Arabia's NEOM green hydrogen project – slated to be the world’s largest green hydrogen production facility – is now officially under construction and is scheduled to be completed by the end of 2026.

Saudi Arabia has reaffirmed its commitment to ensuring oil supplies for Japan, and will continue to cooperate with Tokyo on clean hydrogen, ammonia and recycled carbon fuels.

Kazakhstan says it has reduced its energy intensity by 37% over a decade, and has put in place several plans to become a greener economy, writes the country's Astana Times.

The UAE’s ADNOC Gas has signed a 14-year supply deal with Indian Oil Corporation for the export of up to 1.2 million tonnes a year of liquefied natural gas (LNG), reports Arabian Business. The deal expands ADNOC Gas’ global reach as an LNG exporter.

A G20 major economies meeting in India failed to agree on phasing down fossil fuels following objections by some producer nations. And there was no consensus on mobilising $100 billion a year for clean energy projects in developing economies.

EDP is working together with Lufthansa to fit out the German airline’s main hangar in Puerto Rico with solar panels, as the group looks to halve its carbon emissions by 2030. The 2-megawatt system will provide at least 95% of the site's energy needs and save it an estimated $10 million a year in operating costs.

4. More on energy from Agenda

Long lead times are hampering the speed of the renewable energy build-out worldwide. Here's how innovation and digitalization can accelerate the permitting process for clean energy projects.

A slowdown in clean energy investment growth this year comes at a time when annual investment needs to rise to put the world on track to reach net zero by 2050. Here’s what can be done to ensure the energy transition continues to ramp up at the speed needed to hit emissions targets.

The EU is rapidly implementing policy measures that will accelerate renewable hydrogen production and use. Learn more about the roadmap to building a hydrogen economy at scale.

To learn more about the work of the Centre for Energy and Materials, contact Ella Yutong Lin:

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