Low-carbon energy does not have the same energy security risks as fossil fuels
Fossil fuel inequities are a risk to energy security. Mineral inequities are a risk to the energy transition.
When Russia invaded Ukraine, there was a sudden and dramatic impact on energy prices around the world. Gas prices shot up. Electricity prices in countries reliant on gas did the same. Fertilizers got more expensive (with knock-on impacts on food prices). And many countries – particularly in Europe – were sent scrambling to find alternate supplies.
It exposed, yet again, the vulnerabilities of an energy system where some countries have lots of fuel, and others have very little.
“Energy security” has become another reason to transition from fossil fuels to low-carbon energy.
But – as many people rightly point out – the minerals needed to transition to technologies such as solar, wind, and electric vehicles – aren’t equally distributed either. They’re concentrated in a small number of countries. Concentrations of processing capacity are even more intense. China completely dominates the processing of minerals such as graphite, cobalt, lithium, and rare earths.
Aren’t we just walking into another energy security disaster? Swapping fossil fuel crises for mineral ones?
To be clear: the concentration of ‘power’ in mineral supplies is a problem. We need to take it seriously, and if we fail to, it could have serious implications for the energy transition. Not to mention geopolitics on a broader scale. I’m glad there are great institutions – like the International Energy Agency and the Payne Institute – taking these risks seriously and working on ways to diversify and ensure reliable supplies of minerals across the world.
But it’s worth noting that mineral risks for clean energy are a fundamentally different problem from fossil fuel supplies.
Fossil fuel inequities are a risk to energy security. Mineral inequities are a risk to the energy transition.
The issue with fossil fuels is that they are, well, fuels. If your supplies of coal, oil, or gas are cut off, then you have no energy. If prices of these fuels spike, you have expensive energy. They are a risk to the country’s energy security.
With solar or wind, the fuel is the sun and the wind.1 Other countries cannot block the sun. Sure, they can cut off your access to minerals to build more panels or turbines, but they can’t touch the ones you already have. A hike in prices might slow down your investments in new energy projects, but your existing grid could stay as it is for decades.
The same applies to electric vehicles. Expensive minerals might make it harder for manufacturers to make cheap electric cars this year. But the ones already on the road are not impacted. This isn’t the case for petrol or diesel. High gasoline prices are put on to consumers (unless governments design specific interventions to absorb some of the shocks).
Export restrictions or rising prices on critical minerals will slow down the energy transition, and that’s bad. The world is already moving too slowly. We need to find ways to reduce these risks. But it’s not the same problem as volatile fossil fuel markets, which means the approach and solutions will be different.
Yes, I know these have variable output, but it's usually predictably unvariable and we can prepare for it.
It is more than that: minerals are a reciclable stock, while fossil fuels are flow. They are “burned” in use. Vaclav Smil said (Materials and dematerialization) that 75 per cent of Aluminium extracted in history is still in use. Fossil fuel substitution is difficult, and in my view we will use fossil fuel for backup power for the foreseeable future, but even the partial substitution of fossil fuels by wind and power will be a massive dematerialization event: the largest since the beginning of the Industrial Revolution.
Hannah, with reference to your footnote about renewables having variable output, it is really important to note that intermittent renewable power production has been revolutionised by quality weather forecasting. This means that grid managers have estimates of power to be delivered substantially ahead of time and this makes easier managing a renewables-based grid. The point is that even 48 hours out from delivery there are indications about likely solar PV and wind power delivery. The estimated power delivered gets more accurately measured as the time for delivery approaches. When coupled with time shifting (eg run air con during the day), grid interconnectivity accessing power up to 1000 km away using HVDC cabling, and demand management, the need for fossil fuel (eg gas peaker) backup goes away. A fully electrified wheeled transport system will ultimately provide huge accessible stored power. And of course there is massive adoption of grid-scale battery storage being implemented.
All of the above support energy security and avoid the sovereign risk of depending on fossil fuel supply from far away.