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17 May 2021

Weekly data: Why keeping an eye on copper is vital for the energy transition

Copper is a critical component in the cables needed to decarbonise energy systems, but experts differ on the relationship between the race for renewables and mineral mining.

By Mirela Petkova

It takes a lot of copper to plug in an offshore wind turbine – around 8,000kg per megawatt (MW). Analysis by the International Energy Agency (IEA) suggests the wind industry is the most copper-intensive renewable power technology sector. An average turbine of 3.6MW, which can power more than 3,300 average EU households, will contain close to 29 tonnes (t) of copper.

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Wind Power Market seeing increased risk and disruption

The wind power market has grown at a CAGR of 14% between 2010 and 2021 to reach 830 GW by end of 2021. This has largely been possible due to favourable government policies that have provided incentives to the sector. This has led to an increase in the share of wind in the capacity mix, going from a miniscule 4% in 2010 to 10% in 2021. This is further set to rise to 15% by 2030. However, the recent commodity price increase has hit the sector hard, increasing risks for wind turbine manufacturers and project developers, and the Russia-Ukraine crisis has caused further price increase and supply chain disruption. In light of this, GlobalData has identified which countries are expected to add the majority of wind power capacity out to 2030. Get ahead and download this whitepaper for more details on the current state of the Wind Power Market.
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The main reason for this heavy use of copper is the cables, which enable electricity from the turbines to be transmitted to the power grid.

As the roll-out of wind power increases and turbines get bigger, demand for copper will also shoot up. For reference, today’s global offshore wind capacity stands at 34GW. This figure is expected to pass 230GW by 2030, says the Global Wind Energy Council, a staggering increase of at least 570% in ten years. At the same time, as of May 2021, the copper price soared to an all-time high of $10,440/t (€8,607.82).

Workers of the Next Mineral mining company inspect the Comahue copper mine in Antofagasta, Chile, in March 2021. (Photo by GLENN ARCOS/AFP via Getty Images)

Whether there is enough copper to go round for all industries remains to be seen, but Energy Monitor’s weekly data shows how consultant KPMG believes clean energy production will only have used 2% of global copper assets by mid-century compared with known reserves in 2020.

Reacting to the IEA report, Kingsmill Bond, energy strategist for Carbon Tracker, a UK think tank, accepts the mineral assets needed to build renewable technologies are higher than those required for fossil fuels.

However, he believes this is a narrow way of looking at the issue. “They [IEA analysts] look only at the stocks (the assets you need to build the generator or car) not the flows (the energy you need to run them),” he writes.

In addition, the demand for critical minerals that would be needed to build out the amount of renewable energy to keep global warming below 1.5°C is still 300 times less than current demand for fossil fuels mined out of the earth, says Bond. Put simply, the advantages of renewable energy outweigh by far the disadvantages that come with mining the minerals and rare earths needed to produce it, he argues.

Free Report
img

Wind Power Market seeing increased risk and disruption

The wind power market has grown at a CAGR of 14% between 2010 and 2021 to reach 830 GW by end of 2021. This has largely been possible due to favourable government policies that have provided incentives to the sector. This has led to an increase in the share of wind in the capacity mix, going from a miniscule 4% in 2010 to 10% in 2021. This is further set to rise to 15% by 2030. However, the recent commodity price increase has hit the sector hard, increasing risks for wind turbine manufacturers and project developers, and the Russia-Ukraine crisis has caused further price increase and supply chain disruption. In light of this, GlobalData has identified which countries are expected to add the majority of wind power capacity out to 2030. Get ahead and download this whitepaper for more details on the current state of the Wind Power Market.
by GlobalData
Enter your details here to receive your free Report.

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