Net Zero by 2050: Are We on Course or Losing Ground?
The Paris Agreement aims to limit global warming to 1.5°C, requiring a 45% reduction in Greenhouse gas (GHG) emissions by 2030 and reaching net zero by 2050. However, current national plans are falling short, with GHG emissions projected to increase by 9% by 2030 compared to 2010 levels. Electricity generation plays a crucial role in achieving net zero, as it remains the largest source of GHG emissions.
Sources: Our World in Data, UN, EPA
Renewables: The Game Changer Reshaping the Path to Net Zero by 2050?
Renewable power generation, energy storage and improvements in energy efficiency, including extensive electrification, will be crucial in the path toward limiting global warming to 1.5°C. As agreed at COP28, to reach the 1.5°C target, total installed renewable capacity must expand to 11,200 GW by 2030, representing 77% of total installed capacity. Solar and wind power are expected to generate over 75% of this capacity.
Renewables are gaining traction while the role of fossil fuel in electricity mix is gradually declining. In 2023, global clean energy deployment surged, with solar PV additions rising by 85% and wind turbines by 60%.
Sources: IRENA, IEA
Energy Storage Growth and EV Boom Ignite the Battery Demand
Energy storage is increasingly vital as the global shift to renewable energy accelerates. The primary drivers include the need to stabilize the grid, integrate intermittent renewable sources like wind and solar, and ensure a reliable power supply. Advanced storage technologies, such as lithium-ion batteries and pumped hydro, enable excess energy generated during peak renewable output to be stored and used later, reducing reliance on fossil fuels and enhancing grid resilience. As countries aim for net-zero emissions, energy storage plays a crucial role in decarbonizing the energy sector and supporting a sustainable energy future. However, this surge in energy storage has significantly increased the demand for minerals like lithium, cobalt, and nickel.
Crucial from “grid scale” to “home use”
Battery energy storage systems are deployed across the entire energy landscape, ranging from front-of-the-meter (FTM) utility-scale installations to behind-the-meter (BTM) installations for commercial, industrial, and residential use. The largest of these, the Moss Landing Energy Storage Facility in California, holds a 300-megawatt lithium-ion battery with 4,500 stacked racks, which became operational in January 2021. This helped California prevent blackouts during a severe heatwave in 2022 and also later, unlike the weekend blackout that occurred in 2020.
The rapid growth of energy storage, expected to add over 100 GWh in 2024 and projected to expand by 21% annually to 442 GWh by 2030, is driving battery demand further up.
On the other hand, EVs are significantly boosting battery demand, driven by robust growth in EV market.
Sources: IEA, Bloomberg, WEF
Note: Approximate extracted values
From a Fuel Dependent to Material Dependent Energy Ecosystem
Critical minerals are pivotal for the clean energy revolution, and their demand will surge as these technologies become more prevalent. The inherent 'high mineral intensity' of clean energy solutions highlights the importance of ensuring secure and sustainable resource management as well as addressing the emissions associated with their extraction and use.
Source: IEA
Clean Energy Drives Critical Minerals Demand to New Heights
The transition to clean energy tech and the net-zero targets set for 2050 are driving a significant increase in the demand for minerals such as lithium, which is critical for battery technology. For instance, the demand for lithium is expected to rise from 56% to 91% by 2050 in the Net Zero Emission (NZE) scenario.
Source: IEA
Note: Projections are based on NZE
Behind the Hype: Can Clean Energy be Cleaner??
Mining industry 4 – 7% global emissions
The mining sector, responsible for extracting critical minerals, is also a major contributor to GHG emissions. As demand for clean energy technologies increases, so will the emissions.
The mining industry is currently responsible for 4-7% of global emissions, equating to approximately 1.9 to 5.1 gigatons of CO2 equivalent.
If the mining industry can innovate and reduce its carbon footprint, it will have a substantial positive impact on achieving global net-zero targets.
Source: IEA
Way Forward: Innovation, Not Cutbacks
Despite their high mineral consumption, clean energy technologies are still better than fossil fuels, even under a business-as-usual scenario. With the potential for mines to become low or zero emission mines, the real opportunity lies not in scaling back clean energy investments but in reimagining the future of mining—transforming it into a zero-emission powerhouse through bold innovation and decarbonization strategies.
Sources: IEA, Energy Transitions Commission
Note: The “High-GHG minerals” case assumes double the GHG emissions intensity for battery minerals
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