Base metals to profit from increasing solar energy demand

By 2040, the demand for aluminium, copper and zinc are expected to double with the usage of all these three metals in the solar power sector slated to rise significantly, according to a recent report by Wood Mackenzie.

According to the report, given that solar power will play a key role in decarbonising the global economy and as energy transition takes place at the country-level to meet the decarbonisation targets, it will create new markets for non-ferrous metals in the coming years.

“Base metals are an integral component of solar power systems. A typical solar panel installation requires aluminium for the front frame and a combination of aluminium and zinc for structural parts. Copper is used in high and low voltage transmission cables and thermal solar collectors,” said Kamil Wlazly, senior research analyst, Wood Mackenzie.

He said that falling production costs and efficiency gains have driven down the price of solar power around the world.

As a result, solar has become cheaper than any other technology in many countries across the globe. As costs continue to fall, Solar’s share of power supply will rise and begin to displace other forms of generation. This presents a huge opportunity for the base metals sector.

The report takes into consideration a base case scenario, in which the solar generation capacity worldwide will triple between 2020 and 2030, then triple again by 2050. To keep global warming within the 1.5 °C to 2 °C range targeted by the Paris Agreement, capacity growth would need to be double that.

It is expected that around half of the increased capacity will be installed in mature markets and the Asia Pacific region, with the lion’s share of future growth coming from rapidly evolving demand for green electricity in China, said the report.

Accordingly, the demand for aluminium from solar technologies which was at about 2.4 million tonnes (mt) for 2020, is expected to rise to 4.6 mt by 2040. Copper demand, which was at 0.4 mt in 2020, is expected to rise to 0.7 mt by 2040. With large-scale solar power plants estimated to have a workable life of at least 30 years, only zinc coatings can offer low-cost corrosion protection for such lengthy periods.

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