Energy prices: Grandmother worried about upcoming 'winter bill'
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As the world shifts away from fossil fuels and towards renewable energy generation, experts have predicted that global copper demand will soar over the next few decades. Because copper is a highly efficient conductor of electricity, it is used in renewable energy systems to generate power from solar, hydro, thermal and wind energy across the world. According to a new report by S&P Global, the demand for copper by 2035 is set to nearly double.
The report also adds that in a worst-case scenario, the world could face a major shortfall of 9.9 million metric tonnes of copper in the same period.
The authors of the report wrote: “The gap arises even under assumptions of aggressive capacity utilization rates and all-time-high recycling rates.
“Even with these aggressive assumptions, refined copper demand will outpace supply in the forecast period up to 2035.”
The report also warned that over the coming demands, a scarcity of copper could emerge as a “key destabilizing threat to international security”.
This could be a reference to Russia’s invasion of Ukraine, as EU leaders have been rapidly building new renewable energy generation capacity to end their reliance on Vladimir Putin’s oil and gas exports.
However, it is important to note that Russia is also a major copper producer with refined production of around one million tonnes per year, representing about four percent of global production.
Daniel Yergin, the vice chairman of S&P Global, told CNBC: “The energy transition is going to be dependent much more on copper than our current energy system.
“There’s just been the assumption that copper and other minerals will be there….
“Copper is the metal of electrification, and electrification is much of what the energy transition is all about.”
The report also notes that the countries’ current plans to deal with an impending copper shortage may not be enough, writing: “Substitution and recycling will not be enough to meet the demands of electric vehicles (EVs), power infrastructure, and renewable generation.
“Unless massive new supply comes online in a timely way, the goal of Net-Zero Emissions by 2050 will be short-circuited and remain out of reach.”
S&P Global noted that electric vehicle production is one industry that particularly uses a lot of copper supplies, projecting that the use of the metal in EVs and their related charging infrastructure will more than triple by 2050.
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Renewable energy generation is crucial to the Government’s current strategies to end the global fossil fuel energy crisis, which has been triggered by skyrocketing wholesale prices of oil and gas since Russia’s invasion of Ukraine.
To combat such shortages, the UK launched a Critical Minerals Intelligence Centre earlier this month, which is meant to “help keep the UK ahead of an increasingly competitive global market for critical minerals.”
The Centre, which is run by the British Geological Survey in Nottingham, would boost the country’s resilience and growth by providing up-to-date data and analysis on supply of critical minerals, which are considered vital “to the UK’s economic success and national security”.
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