Decarbonisation, energy security and developing the next generation of high-value manufacturing jobs are three major global-scale challenges that will increasingly dominate the economic, political and social landscape over the coming decades.
These challenges also present huge opportunities for precious metals usage: from demand for silver in solar panels, electricity grids and an increasingly electrified vehicle fleet; to the key role of platinum group metals (PGMs) in producing, distributing, storing and utilising green hydrogen, and the development of low-carbon synthetic ‘e-fuels’.
In order to limit climate change and bring CO2 emissions to net zero by 2050, the International Renewable Energy Agency (IRENA) has estimated that there will need to be an increase in global renewable energy deployments of around 3.5 times current levels by the end of this decade.
Even the historically fossil fuel-focused International Energy Agency has forecast that global electricity generation from low carbon and renewable sources is likely to overtake that from fossil fuels by 2030.By 2050, IRENA has set the goal for a global installed/operation base of 14,000 GWs of solar photovoltaic, some 14 times today’s installed base.
In short, this means a lot more solar and wind energy generation in the mix, with these two sources of energy expected to continue to make up the majority of renewable energy production worldwide.
THE INTERNATIONAL RENEWABLE ENERGY AGENCY (IRENA) HAS ESTIMATED THAT TO REACH NET ZERO BY 2050, GLOBAL RENEWABLE ENERGY DEPLOYMENTS MUST INCREASE BY AROUND 3.5 TIMES CURRENT LEVELS BY THE END OF THIS DECADE.
Solar Capacity Rising Steeply
Driven by the falling cost of solar energy plus government policies to encourage solar uptake (in particular the US Inflation Reduction Act of 2022), installed capacity of solar continues to rise on a steep trajectory.
According to the US Solar Energy Industries Association, installations of solar photovoltaic (PV) capacity in the US are set to rise from around 20 GW per year in 2022 to around 50 GW per year by 2028, with the majority being ‘utility scale’ PV systems capable of generating electricity for the grid.Wherever there is solar PV there is also silver, which is used due to its unrivalled electrical conductivity to carry electrons from the silicon wafer that makes up the PV unit to the electrical grid.
The Silver Institute and Metals Focus estimate that there will be 160 Moz of demand for silver in photovoltaics in 2023, a record high and close to 14% of all silver demand. These figures are expected to continue to grow as solar PV installations increase.
‘Double Whammy’ of Silver Demand
As well as being used in the PV module itself, silver is also used in the interconnectors and safetycritical circuit breakers that make up the wider electricity network, which in many cases is being upgraded to make way for greater renewable electricity capacity. Therefore growth in PV installations represents a double whammy of silver demand not only in the PV unit itself but also in the wider electrical grid.
Silver demand is also benefitting from the drive to electrify the vehicle fleet worldwide, as well as the replacement of natural gas home heating systems with electricity-based ones. As electric cars add more electrical content, loadings of silver will increase to in excess of one ounce per vehicle. Overall, the Silver Institute estimates that electronic and electrical demand for silver will represent a further 220 Moz in 2023, a figure that is also expected to increase in future.
Wind energy also carries positive demand prospects for precious metals, not only in silver electrical contacts, but also in the manufacturing process for glass fibre used in turbine blades, which uses platinum group metals.
Intermittent Conditions Create Challenges
A major drawback of renewables, however, is that they are intermittent. As many people from the London market can attest, weather conditions can range from excessively cloudy to uncomfortably windy, which can create problems of an excess of electrical demand over supply, or at times the opposite situation. Unfortunately, today’s conventional fossil fuel power grids lack the ability to turn on and off quickly enough to match with these intermittent renewable energy sources. The result is the disabling, or curtailment, of solar and wind. Without sufficient baseline electricity generation, the addition of variable renewables can lead to grid instability and power cuts.
This is where grid balancing comes in. An electrolyser can be used to split water into hydrogen and oxygen using renewable electricity in times of abundance. The resulting renewable or green hydrogen can then be stored and utilised when the grid needs extra supplies – simply by combining the hydrogen with oxygen in a fuel cell to generate electricity again.
Platinum group metals are integral to this ecosystem of green hydrogen production and usage: platinum and iridium coatings used in the active part of the electrolyser enable it to start up and shut down rapidly, offering high durability, and the systems can be scaled up to several Gigawatts, helping to combat grid instability at the grid scale.
Green hydrogen produced from renewable-powered electrolysis can also be used as a zero carbon transport fuel when run through a fuel cell (which combines hydrogen and oxygen via PGM catalysts to produce electricity). This is especially relevant for those hard to decarbonise sectors such as heavy duty trucks which are not suited to batteries, and marine and aviation applications which present unique challenges due to their need for energy dense fuels.
Hydrogen can also be used to create zero carbon heat and power – for example from stationary fuel cells – and produce zero carbon hydrogen as a feedstock for other hard to decarbonise sectors such as steelmaking and ammonia.
Building Blocks for The Entire Chemical Value Chain
And perhaps most importantly in the longer term, when green hydrogen is combined with CO2 captured from carbon-intensive industries, we have the building blocks for the entire chemical value chain. Manufacturing zero carbon petrochemicals and synthetic liquid fuels derived from hydrogen (so-called e-fuels) therefore presents a huge opportunity for precious metals both in renewable hydrogen production and as catalysis for many other value-added products.
It is not only in the production and use of hydrogen that PGMs can make a major contribution. Green hydrogen needs to be stored and distributed. Some of the most promising ways of doing this at scale involve using PGM catalysts to store the hydrogen in conventional, widely used chemicals including organic solvents and ammonia before releasing the hydrogen where it is needed.
Putting all these use cases together, there could be close to a million ounces of PGM used annually in all the various hydrogen applications by 2030. This will help push the platinum, iridium and ruthenium markets into substantial deficits in future.
The challenge for precious metals, if they are to contribute to our societal goals of net zero and energy security, is to ensure adequate metal availability. This can be met by a combination of improved recycling (especially of difficult to recycle PV units), optimisation of loadings, ringfencing supply, and risk-hedging metal prices.
With this the precious metals industry can build a new, long-term sustainable demand base and help realise the vital role of clean energy in decarbonisation, energy security and value creation.
WHEN GREEN HYDROGEN IS COMBINED WITH CO2 CAPTURED FROM CARBONINTENSIVE INDUSTRIES, WE HAVE THE BUILDING BLOCKS FOR THE ENTIRE CHEMICAL VALUE CHAIN