Tuesday, November 10, 2020

$15 - $25 Trillion? The True Wild-Assed Guess Cost Of Transitioning To Renewables

oilprice |  This is the amount of money to be invested in new power capacity globally over the next three decades. Most of this—80 percent—will be poured into renewables. This certainly makes the energy transition far from cheap, but no one—at least no one reputable—ever said going green would be cheap. Yet the amount of investments to be directed towards expanding wind, solar, and associated systems will not be the only costs to be borne during the transition. There may well be steep environmental costs as well.

BloombergnNEF, which conducted the analysis that resulted in the investment estimate for the next 30 years in energy, also said that between 2020 and 2050, another $14 trillion will be invested in the grid, likely to adapt it for a surge in solar and renewable power deployments, which, according to the analysis, will constitute 56 percent of total global generation capacity by 2050. And it will have spurred a mini golden age in mining.

Wind power, like solar power, requires a lot of metals and other minerals to produce essential components for the installations. Therefore, as the demand for wind turbines and blades jumps, so will the demand for the metals they are made of. It’s the same with the metals and minerals necessary for the production of a solar panel.

Here’s just one example that could perhaps illustrate the trend: according to a 2017 report by the World Bank, demand for silver could soar from the then-current 24,000 tons annually to more than 400,000 tons. And that’s under a best-case scenario that features a greater penetration of silver-free thin-film PV panels in the energy mix, at the expense of crystalline silicon panels that use silver. Under a worst-case scenario, demand for silver could top 700,000 tons.

This is quite an increase that will require a major expansion in mining and mining is an energy-intensive, not particularly environmentally friendly way of getting finite resources out of the ground, as investor Sam Kovacs writes in an article for Seeking Alpha addressing the challenges of the energy transition from fossil fuels to renewables. Now add to silver a host of other metals used in renewable energy installations, and the mining expansion becomes even more substantial, adding economic, social, and environmental costs to the transition.

Then there is energy storage. Without it, the transition will simply not happen. In fact, some are questioning whether it could happen given the current stage of development of energy storage technology. Two years ago, an article by James Temple for the Massachusetts Technology Review questioned the viability of the energy transition precisely because of energy storage, which, Temple argued, was still prohibitively expensive in light of the scale, to which such storage would need to be developed.