- The global energy crisis has caused a record demand for natural gas as countries seek to reduce reliance on traditional fossil fuels, the International Energy Agency (IEA) has said in this week’s industry report.
- Mineral demand for clean energy technologies is set to quadruple by 2050.
In its global gas security review, IEA noted that the crisis has reshaped natural gas markets, highlighting the need for closer dialogue between producers and consumers to ensure the security of supply. Sparked by Russia’s invasion of Ukraine, the report noted that the crisis transformed the structure of the natural gas market, forcing it to require closer dialogue between producers and consumers looking to ensure both short- and longer-term security of supply and reduce emissions.
IEA’s Director of Energy Markets and Security, Keisuke Sadamori, said the new global gas market is taking shape after last year’s crisis, noting that responsible producers and consumers must reconsider their approaches to supply security and flexibility. Therefore, Executive Director IEA Faith Birol said solar is set to attract more capital than global oil production in 2023 for the first time. He said it reflected the major shift in energy systems worldwide as a sign that clean energy is moving faster than many people think.
The association stated that as technology continues to improve and the costs of solar panels decrease, widespread adoption should be expected. The fact that solar panel installation attracts more capital indicates a strong belief in its long-term viability and profitability. The agency stressed that the role of critical minerals in the clean energy transition as an energy system powered by clean energy technologies differs profoundly from one fueled by traditional hydrocarbon resources.
The agency stated that a typical electric car requires six times the mineral inputs of a conventional car; meanwhile, an offshore wind plant requires 13 times more mineral resources than a similarly sized gas-fired plant. It revealed that since 2010, the average amount of mineral resources needed for a new unit of power generation capacity has increased by 50 per cent as the share of renewables in new investment has risen. The agency highlighted that rare earth elements are essential for permanent magnets in wind turbines and electric vehicles (EVs). Electricity networks need a lot of copper and aluminium, with copper being a cornerstone for all electricity.
The agency noted that mineral demand for clean energy technologies is set to quadruple by 2050 in both the announced pledges and net zero scenarios, with annual revenues reaching $400 billion as high and volatile critical mineral prices and highly concentrated supply chains could delay energy transitions or make them costlier. As countries accelerate their efforts to reduce emissions, they must also ensure that energy systems remain resilient and secure. The rising importance of critical minerals in a decarbonising energy system requires energy policymakers to expand their horizons and consider potential new vulnerabilities.