Electric Vehicles, Wind and Solar Power Are ‘Dependent’ on Copper — Why Nearly Two-Year Lows Are Critical Setback

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The growing demand for copper — driven largely by the acceleration of technologies such as electric vehicles, charging infrastructure, solar photovoltaic, wind and batteries, which are more copper intensive than their traditional counterparts — could “short circuit” net-zero emissions goals, according to a new report.

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The new S&P Global report, The Future of Copper: Will the Looming Supply Gap Short-Circuit the Energy Transition?, finds that the demand for copper could double by 2035. Copper has been deemed the “metal of electrification,” as it is essential to the deployment of technologies needed to achieve net-zero goals by 2050.

This increase in demand could create “unprecedented and untenable” supply deficits, and meeting net-zero emissions by 2050 “will be short-circuited and remain out of reach” unless significant new copper supply comes online in a timely way, according to a press release announcing the study’s findings.

The report notes that, for example, building an EV currently requires about 2.5 times more copper than conventional internal combustion engine cars, as it is present in the internal wiring (harnesses), capacitors (battery packs), and electric motors (e-motors).

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Solar and offshore wind consume two and five times more copper per megawatt, respectively, of installed capacity than traditional power generation technologies such as coal or natural gas.

Compounding the issue, copper demand from traditional sources not directly related to the energy transition would continue to grow.

“This comprehensive analysis demonstrates that, even at the outer edge of what could happen in copper mining and refining operations, there would not be enough supply to meet the demands of a Net-Zero Emissions by 2050 world,” Mohsen Bonakdarpour, executive director, economics and country risk, S&P Global Market Intelligence, said in the release. “Even strong price signals and incentivizing policy initiatives, aggressive capacity utilization rates and all-time high recycling rates would not be enough to close the gap.”

The report notes that the supply gap could have broader consequences across the global economy, disrupting supply chains and putting pressure on the cost of goods for global manufacturers and energy costs for consumers.

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About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.

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