Market for clean energy minerals surges to $320bn: IEA | Energy News

The market remains vulnerable to volatile prices, supply chain snarls and geopolitical tensions despite rising demand.

The market for minerals essential to the clean energy transition rose to $320bn last year but still faces a number of obstacles, including volatile prices, supply chains and geopolitical tensions, the International Energy Agency (IEA).

The market for minerals such as lithium, cobalt, nickel and copper will double between 2017 and 2022, fueled by record deployments of clean technologies such as solar panels and electric car batteries, the IEA said on Tuesday.

Lithium, nickel and cobalt are essential to battery performance, longevity and energy density. Copper is a basic stone for all technologies related to electricity.

An energy system powered by clean energy technologies requires more minerals to build solar plants, wind farms and electric vehicles compared to their fossil fuel-based counterparts. The transition to a clean energy system will therefore cause a significant increase in the requirements for these minerals.

“Rapid growth in demand provides new opportunities for the industry,” the Paris-based agency said in its first annual IEA Critical Minerals Market Review.

“But a combination of volatile price movements, supply chain bottlenecks and geopolitical concerns have created a strong mix of risks for a secure and rapid energy transition,” it added.

The IEA, which advises developed countries on energy policies, says the “affordability and flexibility of energy transition” will depend on the availability of critical mineral supplies.

Prices rose in 2021, and early 2022 as the COVID-19 pandemic resulted in bottlenecks in supply chains and Russia’s invasion of Ukraine caused major disruptions in commodity markets.

Most of the prices after the latter half of 2022 and into 2023, but they remain well above historical averages, the IEA said.

“As things stand, 2023 will be a significant year for clean energy technology prices,” the report said.

“Whether and how quickly they continue on a downward trajectory will depend on the speed of innovation and the stability of the mineral markets that witnessed significant volatility in 2022 after two years of chain disruption that related to the pandemic followed by the onset of global geopolitical uncertainty.”