Article #1 - The role of materials in the energy transition

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“It's all about mining and processing”


Sérgio Granato de Araújo*



A zero-carbon economy will be metal-intensive. Equipment for the transformation of natural energy flows into electricity and solutions for energy storage, powered by Li-ion cells, are key elements for the energy transition bringing, however, concerns about the global supply of strategic minerals and materials to implement them



THE SHIFT TO LOW-CARBON renewable energy (RE) solutions to limit global warming has been in the headlines for decades, although it has intensified in recent years due to the severe environmental impacts and geopolitical issues.


The bills are on the table! If no action is taken, climate change losses will top 5% of global GDP each year (peaking 18-20% in the worst-case scenario). Instead, the costs of reducing GHG emissions to avoid the worst impacts can be limited to around 1% of global GDP each year [1][2].


After relying on a basket of fossil fuels, from wood to gas, passing through coal and oil, the humankind “found” the energy from sun and wind, to put simple. These two primary clean energy sources, complementary to each other, widespread and abundant on earth, can be converted into a secondary form, the electricity, sine qua non for the energy transition.


Nevertheless, the transformation of the energy sector, imposed by processes of decarbonization, decentralization and digitalization, brought technical, economic, and regulatory challenges that need to be overcome quickly as time is running out. In fact, the great uncertainty concerns the speed of this transformation [3].


One of the main technical challenges occurs when RE exceeds that provided by conventional synchronous generators in a grid section. The lack of rotating mass inertia of solar PV and wind power generation units can lead to system instabilities. By using advanced power electronics and control algorithms, these inverter-based resources (IBR), when ideally paired with storage, can emulate inertia by quickly detecting frequency deviations and respond to system imbalances [4].


A new paradigm


Curiously, clean energy transition relies no more on a fuel, as seen before, but in materials. More precisely, a net-zero economy will be metal-intensive [5]. So, new energy-trade patterns are strongly related to the occurrence of critical mineral deposits, extraction capacity, raw material refining expertise, and material processing. A real game changing!


A critical mineral is defined as a non-fuel mineral or mineral material essential to the strategy, economy, and security of a nation, with high-risk associated with its supply chain [6]. Ok, but what and where are they? Who owns the mining and refining technologies? What about starting with a short list of machines/equipment associated with the green transition? Here it is: solar panels, wind turbines, electric motors, electrolyzers, fuel cells, and batteries!


Lithium, nickel, cobalt, vanadium, graphite, platinum group metals (PGMs), tellurium, and rare earth elements can face significant supply shortages in the coming years. Lithium production is concentrated in Australia, the largest producer, from Li-spodumene deposits, and Chile, the owner of the largest Lithium reserves, from Li-brine deposits. Together with Argentina and China, the four countries account for more than 95% of global Lithium production [7].


Also, mine production of rare earth oxides is sourced almost exclusively from China. The country's dominance in the critical minerals supply chain is even more pronounced at the refining stage: today China controls 80% of the global Lithium-ion (Li-ion) battery (LiB) raw material refining, surpassing Japan and South Korea, leaders of the early 2010s [8].


Energy storage need


In a clean and sustainable environment, energy storage systems (ESS) will be required for RE integration to compensate the temporary unavailability of solar PV and wind power plants, at night and at morning, respectively, as well as smoothing out fluctuations in short periods of time. Furthermore, ESS play a vital role by coupling different energy sectors, such as electricity, heat, and mobility.


In addition to enabling the increased use of non-conventional non-dispatchable RE generation, ESS are used for power grid operation optimization, mainly in voltage/frequency deviation compensation schemes. Also, ESS is capable of capturing surplus energy, i.e., the excess of renewable generation that would otherwise be wasted. Moreover, ESS increases self-supply efficiency, paving the way for a high degree of energy autarky.


But defossilisation is a hard task. The gravimetric energy density of diesel is about 70 times greater than today`s LiB. Also, in a very real sense, a kg of coal or a liter of oil represents stock, i.e., energy storage. Lastly, while clean energy systems are taking their first steps, the fossil fuel industry is tightly integrated and consolidated, with an asset value estimated at over USD 25 trillion [9]. These attributes explain the complexity of replacing fossil fuels from the world's economy in the short term.


Non-electrochemical ESS is best represented by pumped hydro storage (PHS) systems, which dominate today´s grid-scale energy storage but suffer from geological limitations and lack of modularity, and power-to-gas/-liquid (P2G/P2L) approaches, using hydrogen or methane/(refrigerated) ammonia or methanol as energy carrier, respectively. Always associated with lower round-trip efficiency (< 50%), P2G/P2L are better suited for long-term energy storage schemes.


New kids on the block


Undoubtedly, the most promising and prominent ESS is the electrochemical battery ESS (BESS), thanks to its incredible flexibility. BESS converts chemical energy contained in its active materials into electricity by redox reactions. Currently, it is produced in many sizes and shapes for a wide spectrum of short-term energy storage applications, ranging from mW to MW scales.


LiB has key technology advantages when compared to alternative cell chemistries. As the first alkali metal of the periodic table, Lithium provides the largest amount of electrical energy per unit of weight among all solid elements [10]. Sodium (Na) and potassium (K), two other alkali metals, about 1000 times more abundant than Lithium and easier to extract, also have high electronegative potential. However, they weigh about three and five times as much as Lithium, respectively, making the latter by far the first choice for e-mobility.


LiB is the today superstar in the BESS industry because of its high energy capacity, power capacity, cyclability, and round-trip efficiency. The global LiB market increased more than 70% in 2021 alone, as a result of an average yearly increase in battery shipments for i) electric vehicles (EVs) of 90.2%, ii) ESS of 113.3%, and iii) consumer electronics of 6.3%, the last two representing 18.8% and 13.8% of total Lithium battery shipments, respectively [11].


But, the growing demand for LiB has raised supply concerns related to materials such as Lithium, cobalt and graphite due to the scarcity and uneven geographic distribution of their main ore reserves, driving up battery raw material prices sharply: Lithium price has skyrocketed in early 2020s, rising up almost 500% in just one year [12]. Furthermore, LiB manufacturing, which has a long and highly-complex process chain, has serious shortcomings from a safety, temperature, and environmental perspective.


The tight supply chain for Lithium will be addressed in the next post (Article #2).



17, August, 2022


* Professor at School of Electrical, Mechanical and Computer Engineering (EMC) of Federal University of Goiás (UFG)


References

[1] http://mudancasclimaticas.cptec.inpe.br/~rmclima/pdfs/destaques/sternreview_report_complete.pdf

[2] https://www.weforum.org/agenda/2021/06/impact-climate-change-global-gdp/

[3] https://blog.ibmec.br/noticias/valor-economico-professor-thiago-de-moraes-moreira-publica-artigo-sobre-transicao-energetica-inflacionaria/

[4] https://www.energy-storage.news/demystifying-synchronous-grid-forming-technology/

[5] https://www.mckinsey.com/industries/metals-and-mining/our-insights/the-raw-materials-challenge-how-the-metals-and-mining-sector-will-be-at-the-core-of-enabling-the-energy-transition

[6] https://www.usgs.gov/news/national-news-release/us-geological-survey-releases-2022-list-critical-minerals#:~:text=The%20Energy%20Act%20of%202020%20defines%20a%20%E2%80%9Ccritical%20mineral%E2%80%9D%20as,supply%20chain%20vulnerable%20to%20disruption

[7] https://www.fineprint.global/publications/briefs/lithium/

[8] https://about.bnef.com/blog/china-dominates-the-lithium-ion-battery-supply-chain-but-europe-is-on-the-rise/

[9] https://geopoliticsofrenewables.org/report/addressing-root-causes-of-geopolitical-instability

[10] https://www.doitpoms.ac.uk/tlplib/batteries/printall.php

[11] https://www.controleng.com/articles/lithium-ion-battery-market-expected-to-grow/

[12] https://www.bloomberg.com/news/features/2022-05-25/lithium-the-hunt-for-the-wonder-metal-fueling-evs

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