Home Business Europe can lose the race with the transition of energy before it...

Europe can lose the race with the transition of energy before it really starts

87
0





In a recent report called Global Energy Perspective 2022, consulting firm McKinsey said it expects wind and solar panels to become a kind of base load generation capacity as early as 2030. The report also praised the technological advances that have increased the cost of wind. , solar panels, electric cars and batteries have declined significantly over the past few years

This report did not say that the “base load scenario” would be implemented only if there were sufficient raw materials. As a leader in the transition race, Europe is particularly vulnerable to any shortage of these raw materials. Because of these shortcomings, the transition may end before it begins in earnest.

So far, everything seems to be going pretty well. Electric car prices are rising, but sales are still strong, at least in part because of government incentives, and in part because of rising fuel prices.

But there are clouds on the horizon.

The Chinese company CATL, one of the major companies in the field of batteries, recently reported a drop in profits in the first quarter due to rising production costs. This suggests that the company has so far absorbed the cost increase caused by the reduction in raw material supplies, but how long it will continue to do so remains an open question.

Meanwhile, the CEO of Rivian, an EV startup that supports Amazon, warned of a lack of battery in the EV space. And it was a serious warning: “Simply put, global cell production together is much less than 10% of what we need in 10 years,” RJ Scaringe was quoted as saying by the Wall Street Journal. “This means that 90% to 95% of the supply chain does not exist.”

One would think that at least the wind and solar chains are well developed. It may be so; however, the metals needed to supply these supply chains are problematic supplies, especially in Europe.

Like fossil fuels, Europe has little local production, so it is heavily dependent on imports. What is more complicated for her, the main supplier of aluminum, nickel and zinc is Russia. Almost all lithium and rare earth substances used in Europe also come from abroad.

“The global energy transition is progressing faster than the mining pipeline, with copper, cobalt, lithium, nickel and rare earths at risk of disrupting demand by 2035,” said the study’s authors from Belgium’s KU Leuven. The university, which warned Europe, faced a shortage of all the major components of the transition to energy.

Local production is desirable but unlikely, at least on a scale that would make sense. An analysis of the situation by Reuters, conducted by Andy Home, notes that the regulatory regime in the union is such that any new mine takes 15 years from planning to production.

In other words, Europe has made it impossible for its own miners to produce the metals the continent needs to switch from fossil fuels locally. At the same time, his attitude towards Russia and China, he risks a significant part of the current supply of these metals and other critical materials. And this time the U.S. can’t come to the rescue because they are struggling to reduce their own dependence on foreign sources of critical metals and minerals.

The solution? Recycling, according to study authors KU Leuven. Between 2040 and 2050, the EU can get between 50% and 75% of the important minerals needed for recycling. That is, if the EU is acting now to develop a supply chain for recycling. And if he finds a way to bridge the gap between supply and demand for these minerals by 2040.

Irina Slav for Oilprice.com

Previous articleThe health and education sectors are most prone to cyber incidents
Next articleDeputy General Director of NTA: Light Rail may be operating this year