High commodity prices could delay energy transition, says IEA

The International Energy Agency warns that high commodity prices can delay the transition to clean energy due to the amount of metal needed. battery, Solar panels and wind turbines.

Achieving the goals of the Paris Agreement will quadruple mineral demand by 2040, the IEA said. However, lack of investment in new mines risks significantly increasing the cost of clean energy technology, a report released Wednesday said.

“Achieving climate goals will accelerate demand for important minerals,” IEA Secretary-General Fatibirol told the Financial Times. “It [the energy transition] There is definitely the potential for slowdowns as a result of increased costs. ”

Commodity Price — From Lithium cobalt — This year has recovered as demand for clean energy technology has increased and the government has rolled out a green stimulus package. According to the IEA, sales of electric vehicles increased 41% last year, with approximately 3 million units sold worldwide.

“To get enough electric cars, wind turbines, hydrogen, solar and batteries, you need important minerals at an affordable price, otherwise it’s a formidable barrier to achieving your climate goals.” Said Birol.

According to the report, the group of raw materials used in batteries is expected to capture the largest surge in demand. Demand for lithium is expected to increase more than 40 times if countries want to reach the goals of the Paris Agreement.

The IEA, founded in the 1970s to secure the world’s oil supply following the first oil crisis, said important minerals are now the key to national energy security.

According to the IEA, the production of the key minerals needed for clean energy technology was much more concentrated than in the oil market. For example, the Democratic Republic of the Congo produces more than 60% of the world’s supply of cobalt, an important battery material.

“Energy systems rich in electrified renewable energy will not eliminate concerns about price volatility and supply safety,” he said.

Birol warned that rising commodity prices could outweigh the cost savings achieved by increasing production of clean energy technologies such as batteries. If the prices of lithium and nickel double, the cost of manufacturing lithium-ion batteries for electric vehicles will increase by 6%.

Rising copper prices, hit Birol added that last week’s 10-year high of over $ 10,000 could add $ 5 trillion to the cost of achieving climate goals over the next 20 years.

However, investors are not investing enough in new mines. It takes an average of more than 16 years for a mining project to go from discovery to first production. In short, the IEA writes that investment is needed now.

“Investors are not yet convinced that the government is serious. [about] We will reach our climate goals, “said Mr. Virol. “There is no strong enough and clear signal given by policy makers about the speed and decision of energy conversion.”

High commodity prices could delay energy transition, says IEA Source link High commodity prices could delay energy transition, says IEA

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