Batteries and resource limitations
We anticipate significant growth in the demand for rare earth metals, as well as nickel, manganese, chrome, and copper, in line with the exponential growth in batteries, and materials used for production of wind turbines, solar panels, and electronics.
New energy sources will have a considerable footprint on land and offshore areas but can generally co-exist with other activities; biofuel production, on the other hand, will compete directly with forestry, as well as food production on arable land.
Our investigation into the raw material and space requirements, both on- and offshore, associated with our forecast reveals no ‘show stoppers’ in the form of resource or spatial constraints. Moreover, the circular economy will strengthen over time, with materials reused rather than discarded or burned.
However, policy consideration will have to be given to competing usage demands, including fossil fuel extraction, the co-location of solar and wind farms with residential areas, and the trade-off between biofuel and food production.
Projecting a continued learning rate of 19%, battery costs in 2050 will decline to USD 25/ kWh, from 125 today. This will result from – and is a decisive factor behind – the massive uptake of EVs. Moreover, it allows otherwise inflexible wind and solar PV power to afford system flexibility almost in line with dispatchable electricity. Within a decade, cobalt will face resource limitations, which we believe can be solved – competing technologies will first supplement and then replace current lithium-chemistries as we know them. V2G (vehicle-to-grid) solutions will become widespread in homes, parking garages, and street parking, thus allowing 10% of EV batteries on average being made available to provide around 30% of the storage capacity available to the power system by 2050. Dedicated power system batteries, including both Li-ion and redox flow batteries, will grow fast after 2030, providing 62% of storage capacity by 2050, which will total 27 TWh by then.