Wind energy

Wind power requires higher amounts of copper per unit of energy produced than fossil fuel-based power generation. The copper content of an installed wind turbine is 2.5–6.4t/MW, according to the Copper Alliance. Copper is used in the coil windings in the stator and rotor portions of the generator (0.7-4.0t), in the high-voltage power cable conductors (0.7-1.0t) and in transformer coils and earthing (0.7-1.4t).

This means an average onshore wind turbine capacity, which would be 2.5–3MW, according to The European Wind Energy Association, would require 6.25–19.2t of copper. Meanwhile, an average offshore wind turbine capacity of 3.6MW would require 9-23t. These estimates can range even higher, with Denmark's Vestas, the world’s biggest wind turbine manufacturer, estimating that a 100MW wind farm using 4.2MW turbines would use around 89t of copper.

The US Energy Information Administration (EIA) expects 7.6GW of wind capacity to come online in 2022, following a record-high 17.1GW of new additions in 2021. In the US state of Oklahoma, American Electric Power (AEP) has brought online the 998MW Traverse Wind Energy Centre, North America’s largest single wind farm built at one time.

The wind park consists of 356 units of 2MW GE turbines installed in Blaine and Custer. Traverse is the third and final wind project in the North Central Energy Facilities, which provide 1484MW of clean energy. The North Central Energy Facilities also include the 199MW Sundance and 287MW Maverick wind farms, which began commercial operation in April and September 2021, respectively. Traverse, Maverick and Sundance represent a US$2bn investment.

The size of turbines has been increasing steadily, particularly offshore turbines, and technological improvements mean this trend will continue. The US government has set a goal to deploy 30GW of offshore wind power in the US by 2030. Efforts to meet this target will trigger more than US$12bn per year in capital investment in projects. This will unlock a pathway to deploy 110GW by 2050.

Construction has begun on the 806MW Vineyard Wind 1 project in Massachusetts, the first commercial-scale offshore wind farm in the US. The project is expected to cut carbon emissions by over 1.6Mtpa, roughly equivalent to removing 325k cars from the road every year. Maryland and Massachusetts have selected four new offshore wind projects in their latest tenders, paving the way for 3.2GW of new capacity.

The UK government, under its new energy security strategy, is targeting up to 50GW of offshore wind by 2030, up from the previous target of 40GW. The UK currently has just over 10GW of offshore wind power in operation. Scotland’s target is 11GW by 2030, with 2GW currently constructed and around 8.4GW under development. A total of 17 projects that were awarded offshore wind leases in the latest ScotWind auction have signed their option agreements and can proceed with development.

France has kicked off the competitive bidding process for the development of two 250MW floating offshore wind projects in the Mediterranean, with plans to announce successful tenders next year. The first facility is planned to be built off Narbonne, while the second will be located off the Gulf of Fos. The new wind farms are expected to be commissioned by the end of the decade and are planned to be expanded by 500MW each.

In Denmark, Vattenfall has taken a final investment decision on the 344MW Vesterhav Syd and Vesterhav Nord offshore wind farms. The US$870m (EUR769m) wind farms, planned to be built offshore from western Denmark, are expected to be completed by 2023.

Solar Energy

Similarly, solar power is also copper-intensive when compared to its fossil fuel-based counterparts. The copper content of a solar PV is around 5t/MW. The IEA has forecast that reaching net zero carbon emissions by mid-century would require 630GW of solar power to be added to the world’s supply by 2030. Over the longer term, continuous growth in solar additions will be spurred by lower investment costs and ongoing policy support.

The US EIA expects the country’s utility-scale solar generating capacity to grow by 21.5GW in 2022, surpassing last year’s 15.5GW of solar capacity additions. An initiative to boost distributed solar energy in the US state of New York to at least 10GW by 2030 has been approved by the Public Service Commission (PSC). Governor Kathy Hochul announced a plan to expand the US$1.8bn, NY-Sun programme in September 2021 to bolster the state’s post-pandemic economic recovery. The state is currently approaching the programme’s 6GW by 2025 goal. The new distributed solar goal aligns with the state’s aim of getting 70% of its electricity from renewable energy by 2030.

In Nevada, Primergy Solar expects to begin construction of the giant US$1.2bn Gemini solar and storage energy project in the June quarter. The complex, set to be the country’s largest-ever solar development, will be made up of a 690MW capacity PV plant and a 1,416MWh (380MW) battery energy storage system . It is expected to come online in late 2023 or early 2024.

In Spain, power utility Endesa SA plans to invest US$3.48bn (EUR3.1bn) through 2024 to grow its renewable energy capacity to 12,300MW. Endesa expects to add 4GW of new renewable energy capacity by the end of 2024, with solar projects making up 90% of the total, and wind projects making up the remainder.

Electric Vehicles (EVs)

Copper is found in every major component of EVs, from batteries to motor coils and from inverters to wiring. The copper content inside lithium-ion batteries ranges from 30kg for a 60kWh nickel-cobalt-aluminium (NCA) battery type to 42kg for a 60kWh nickel-manganese-cobalt (NMC) 811 type. The remaining components, mainly the electric motor and wiring, account for around 40kg/unit of copper. An electric car contains around 80kg of copper, which is at least four times the content of an internal combustion engine (ICE) vehicle. An electric bus contains 11 – 18 times more copper than a fossil-fuelled bus.

Furthermore, copper is a key component required for charging infrastructure. Copper content ranges from 2kg for an AC level 1 charger or 7kg for an AC level 2 charger to 25kg for a DC fast charger.

Global electric car sales are estimated to reach 6.6m in 2021, up 109% year on year, even as the overall car market stagnated on the back of supply-chain disruptions. EV sales in 2021 represented 9% of market share, compared to 4.1% in 2020 and 2.5% in 2019.

AME expects this year will be another strong year for EV sales as gas prices soar. We expect sales of passenger EVs to reach 9.4m in 2022, taking a market share of around 12% of global car sales. Sales will also be driven by a growing number of competitive models, tighter emissions regulations, subsidies, and fleet purchases. The gradual easing this year of the chip shortage which stalled auto output last year will help manufacturers boost production to meet growing demand for electric cars.

The dramatic uptake in EVs will continue into the medium to long term due to supportive government policies and subsidies, new and improved models, and increased consumer awareness via better availability and promotion. The world needs to halt the sale of ICE vehicles by 2035 to reach net zero emissions by 2050, according to International Energy Agency (IEA). Governments. Automakers and consumers are increasingly getting on board with this change.

In the US, the rapid shift to electric vehicles is central to President Biden’s pledge that the US will cut its greenhouse gas emissions to 50% of 2005 levels by 2030. This ambitious goal would require a radical transformation of the nation’s economy, including cars and trucks powered by ICE being replaced by their zero-emission counterparts.

China is aiming for 20% of all new sales to be new energy vehicles (NEVs) by 2025. This target was lowered last year from the previous 25% goal outlined in late 2019, which was considered too ambitious. The development plan outlined preferential tax policies for NEVs, further infrastructure funding for charging points, and supportive policies for parking and charging. China’s two largest utility companies, State Grid Corp of China and China Southern Power Grid, have invested almost US$1bn in charging infrastructure, and the latter has promised an additional US$3.6bn over the next four years.

In Europe, Tesla plans to build a gigafactory outside Berlin, which would mark Germany's first auto plant in two decades. However, Tesla missed its mid-2021 opening date as the German permitting agencies enforced strict permitting requirements. After a long wait, Tesla Gigafactory Berlin won its final environmental approval from Germany in March.

The transition away from ICE-powered vehicles hinges upon convincing consumers of the benefits of EVs. This has been historically tricky given the much higher cost of EVs, and concerns about charging time and availability. However, increased government funding to stimulate the rollout of public charging infrastructure and technological improvements will go a long way towards addressing these concerns. For example, Tesla has now unveiled its third generation V3 Supercharger, which can charge a vehicle in less than 15 minutes.

EVs will keep getting less expensive over time as the cost of the battery, the single biggest component cost, drops. Battery costs will keep falling thanks to manufacturing improvements and technological advancements. Electricity is cheaper on a per mile basis than gasoline, and EVs require less routine maintenance than combustion-engine cars, as there is no oil to change.

Race to Secure Copper

Green transition cannot be delivered without copper. Copper producers have been taking actions in hopes of grabbing the market share and making efforts to stay ahead of the curve. They have been active in merges and acquisitions of copper resources. Meanwhile, they are quickly advancing their new projects, expanding their existing operations, or considering restarting operations under care and maintenance.

However, current pipelines are still not sufficient to meet rapid growing demand for copper. There has been a growing focus on developing new recycling capacities, particularly in North America, Europe as well as Asia. Aurubis is developing a recycling and secondary-smelting plant in the state of Georgia. The new site will be the first secondary smelter for multi-metal recycling in the US. Commissioning is planned for the first half of 2024.