A shift to 100% renewable (wind and PV) energy is considered by many to be a necessary move to ensure sustainability of our current society. However, there are many hurdles to that goal being realised. This note will consider just one – the extraordinary amount of additional copper supply that will be required.

World copper production in 2019 was 20 million tonnes, with the largest producers being Chile and Peru. The US Geological Survey estimates that world reserves of copper are 870Mt, thus around 40 years supply at current production rates. This reserve will not last very long at all with a conversion to renewable energy. It is estimated that additional resources of 2 billion tonnes may be mineable.

To look at just one example. It is estimated that there are 1.2 to 1.4 billion cars in the world today, virtually all of which have internal combustion engines. Should this fleet be replaced by electric vehicles, the demand for copper will soar. An electric vehicle typically contains 80 or more kilograms of copper, compared with 12-15Kg in a conventional car.

Assuming all copper in a conventional car can be recycled, we would need around 80 million tonnes of copper for an all-electric fleet. That is, around four times current annual production. In other words, with current technology, only a small fraction of the current car fleet could be replaced by electric vehicles each year.

Photovoltaic cells (“PV”) and wind will also require vast amounts of copper, along with other elements and materials. For example, PV’s require copper, cadmium, gallium, germanium, indium, selenium, tellurium and silica to produce electricity. The supporting infrastructure requires aluminium, concrete, copper, glass, nickel, steel and zinc.

My conclusion is that with current technology a shift to 100% renewables is unlikely in the near term. And further, the energy required to build 100% renewables is huge, and much will come from fossil fuels.

The US EIA estimates that world energy consumption will increase by 50% by 2050. At some stage this ever-increasing demand for energy will need to slow, probably encouraged by a switch to renewables.  It seems the future will be fewer people living much less energy intensive lives. And this is what a Green New Deal means.

03 March 2020 Commodities