High gas prices have so caught everyone’s attention that this is now one of the main topics we are going to talk about today! For the global energy industry and the modern way of life, this could be more serious than a temporary spike in gas prices in Europe.
A Real Problem
Lithium is one of the main components of batteries (10 to 30% of their price) for renewable energy sources (RES), electric cars, mobile devices, laptops and household appliances. The battery accounts for up to 50% of the cost of electric cars and up to 70% of the cost of renewables. In other devices it is noticeably less, but also affects their price. By the way, if it had been just one lithium problem, that would have been half the problem. The prices went up for almost all the rare-earth metals and other elements which are used in the renewable energy industry and electric transport. Silicon by 300%, aluminum by 37%, cobalt by 85%, neodymium by 58%, magnesium by 94%, copper by 25%, zinc and nickel by 20%. And this is not an exhaustive list at all.
The already built RES facilities can be only indirectly affected by this price increase, when repairing or replacing batteries. But the construction of new wind and solar power plants, the amount of which was forecasted at a record level in 2021-2024, the rise in prices for components will have the most direct effect. Suffice it to recall that much of the rapid growth in RES capacity in 2019-2020 was due to very low prices for lithium, cobalt, silicon and aluminum.
Energy
Renewable energy also requires resources, from which wind turbines and solar panels are made, and this is the most expensive part in the cost of RES generation, explains Konstantin Simonov, head of the National Energy Security Fund. Wind turbines are 70% made of metals and alloys, and solar panels are made of silicon. All of this will have record high prices in 2021 and will naturally have an impact on the cost of generating new capacities in the renewable energy industry.
Many projects in the field of renewable energy may be under threat. But the rise in price of rare-earth metals for manufacturing of electric cars is especially painful. It was the reduction of the cost of batteries (while increasing their capacity) that was the main way of developing this industry. But now, due to rising prices for battery components, this strategy looks very questionable, the expert emphasizes. Almost all rare-earth metals and other elements that are used in renewable energy and electric transport have become more expensive. However, if you are somewhat connected to a gas station, then you might be interested in some rules of how to be safe in there. Read more here.
Reasons of The Price Growth
The reasons for the growth of prices for components for renewable energy sources are rooted in the rejection of coal, oil, and gas. Firstly, demand for lithium, cobalt and other elements has been growing like an avalanche in recent years under the influence of the climate agenda and the growth of renewable energy generation, which could not but affect their prices. Secondly, there are limited and, importantly, concentrated reserves of lithium and cobalt in a few countries that are already in development.
Simonov says that all this may result in a global economic crisis that can only be avoided by stopping the mixing of the energy sector and politics, which largely determines the climate agenda. If the use of renewable energy sources by force is not stopped, the world may face a new wave of energy crisis, each time stronger than the previous one. According to him, a sensible, balanced approach is necessary, at least with coal. It is clear that it will gradually leave generation, but it should not be rushed and its age will be longer than predicted in Europe. Moreover, if you travel all over the Europe often, then it can be interesting for you to know what gas stations that take apple pay.
The Environment Matters
Liquefied natural gas is much more harmful to the environment than pipeline gas. In general, the Ministry believes that natural gas can replace coal and oil during the transition period. However, when assessing the environmental damage, emissions during production and transportation must be considered.
Environmentalists call LNG the optimal fuel for ships operating in northern waters. Switching to it can reduce the costs for the inhabitants of the Polar region as well. Freqing technique is harshly criticized by ecologists and environmental activists. This method involves pumping a mixture of water, sand and chemicals under pressure to great depths.
That’s It!
The result is a fracturing of the solid rock, mostly gas-bearing shale. The natural gas is released from the solid rock and rises to the surface. Specialists believe that fracking can cause earthquakes in the region and can contaminate the water with toxic chemicals. And we hope you liked this article and found out that high gas prices are not great for our climate.