Copper
Feature Articles
Wind Takes Off, Lifting Copper
April 2021
The accelerating shift towards renewable energy will require huge quantities of copper as governments pledge to reach net zero emissions of greenhouse gases by 2050. This is particularly the case for wind energy, which is the most copper-intensive form of power generation and will consume the highest amount over the next decade in this sector. AME forecasts that copper demand will double by 2050 resulting in a 2.15% CAGR, the highest in the base metals class.

The Biden administration announced in late March a major offshore wind plan along the US East Coast with a goal of deploying 30GW by the end of this decade. This would be enough to power 10m American homes and cut 78Mt of carbon dioxide emissions. The country, which had record onshore wind turbine capacity additions last year putting total installed capacity at 118GW (EIA), has been slower than its European counterparts to adopt offshore technology.

Wind power has grown significantly over the past 30 years as technology advances have lowered costs and governments have incentivised growth via subsidies. Indeed, global capacity additions are forecast to accelerate to 68GW (7.3GW offshore) in 2021, driven by delayed onshore projects becoming operational as key countries in Europe and the US have passed regulations providing flexibility for commissioning deadlines.

Despite the impacts of the pandemic on energy consumption, renewable energy still managed to account for 90% of all new electricity generation last year, according to the IEA. Out of all new renewable electricity generating capacity in 2020, wind power accounted for around 33%, making it second only to hydropower.

 

The Role of the Red Metal

The copper content per installed wind turbine is 2.5–6.4 tonnes (t) per megawatt (MW), according to the Copper Alliance. Copper is used in the coil windings in the stator and rotor portions of the generator (0.7-4t), in the high-voltage power cable conductors (0.7-1t) and transformer coils and earthing (0.7-1.4t). This means an average onshore wind turbine capacity of between 2.5–3 MW (The European Wind Energy Association) would need between 6.25–19.2t of copper. Meanwhile, an average offshore wind turbine capacity of 3.6MW would require between 9-23t of the red metal.

Copper’s conductivity is almost twice that of aluminium, which makes it the metal of choice for cabling for high energy efficiency applications. A 240km electricity interconnector between Britain and France called IFA2 used 9kt of copper, according to the UK’s National Grid. A planned link to Denmark of 760km will require 26kt.

While copper in wind turbines is still a relatively small component of costs—around 1%—according to the National Renewable Energy Laboratory (US Department of Energy), that’s set to rise to around 3% by 2050. The biggest wind turbine manufacturer, Denmark's Vestas, estimates that a 100 MW wind farm using 4.2MW turbines would use around 89t of copper in the turbines. Using AME's March 2021's average European copper price of US$9,006/t, that would total about US$801,534.

 

 

Offshore wind turbines have steadily been increasing in size and technology improvements mean this trend will continue. General Electric announced in November that its Haliade-X 12MW prototype, the world’s most powerful wind turbine, received a full type certificate. The technology has been selected as the preferred wind turbine for the 120 MW Skipjack and 1,100 MW Ocean Wind projects in the US. The Haliade-X 13 MW, which is expected to obtain certification in the first half of 2020, will be used at what will be the world's biggest offshore wind farm—the UK's 3.6GW Dogger Bank wind farm—with 190 units to be installed. The three-phase project, off the North East coast of England, will be capable of powering 6m British homes when it comes online in 2026.

 

Wind Takes Off

By the end of 2020, the wind energy industry had shaken off pandemic-related supply disruptions, with turbine manufacturers' orders for the full-year exceeding 2019. The offshore wind sector, in particular, was only mildly affected by the Covid-19 crisis due to long project lead times.

The IEA forecasts that global wind capacity additions reached 65GW in 2020, 8% more than in 2019. This comprised 60GW of onshore capacity, up 11% from 2019, while offshore wind slipped 13% on-year to 5.3GW. China accounted for almost half of onshore wind capacity growth last year with 29GW, jumping 22% on-year, while the US reported an even greater 32% surge to 12GW. By contrast, European capacity additions declined 12% on-year to 9.2GW.

 

 

Onshore wind capacity additions are expected to further accelerate in 2021 thanks to the commissioning of delayed projects in Europe (mostly in France, Germany, Sweden and the Netherlands), and to faster growth in India and Latin America. Looking at offshore wind, China accounted for over half of global expansions for the first time in 2020 with 2.6GW, while European countries provide the remainder (UK 0.8GW, Netherlands 0.8GW, Belgium 0.6GW, Germany 0.2GW).

In 2022, global annual installations will ease back to the 2019 level due to the phase-out of incentives in China and the US, which is partly offset by faster expansion in Europe. The share of offshore capacity in total wind additions reaches almost 15% in 2022 – 50% higher than in 2019 – due to acceleration in key European markets and large capacity becoming operational in the growing markets of France, Korea, and Vietnam while the Chinese market slows. With an extensive slate of projects supported by auctions, the US is anticipated to become one of the largest offshore markets in 2024.

Annual global wind additions in 2023-25 could range between 65GW and 100GW, the IEA predicts, contingent on policy support schemes. The share of offshore wind in total wind additions is expected to have risen further by 2025, reaching 20% as deployment in new markets gains momentum.

 

Biden Gets Behind Wind

While offshore wind has been booming for more than a decade in Europe, the uptake has been slower in the US. President Biden's ambitious plan is designed to jump-start the nascent industry to create jobs and fight climate change.  

To support meeting the 30GW by 2030 target the administration said it would expedite permitting for proposed wind projects off the Atlantic coast, offer US$3bn in federal loan guarantees for offshore wind projects and upgrade the nation’s ports to support construction. Officials said that offshore wind deployment would directly create 44k new jobs, such as building and installing turbines, and indirectly create another 33k. The move comes as Mr Biden prepares a US$2tn economic recovery plan that will focus heavily on infrastructure, another key demand driver for copper.

The Bureau of Ocean Energy Management (BOEM) in March completed the environmental review of the nation’s first large-scale offshore wind farm, off the coast of Martha’s Vineyard in Massachusetts. This places the project one step away from receiving a record of decision from BOEM, the last approval required for construction to begin. The project, which involves 84 large turbines with 800MW of capacity is slated to come online by 2023.

Vineyard Wind is one of 13 offshore wind projects proposed along the East Coast, and the Interior Department has estimated that as many as 2,000 turbines could be rotating in the Atlantic Ocean by 2030.

Total US electricity generation from wind energy surged to about 338bn kWh in 2020, from about 6bn kWh twenty years prior. Last year, wind turbines were the source of about 8.4% of total US utility-scale electricity generation, according to the EIA. Given the turbine additions in late 2020, the federal agency expects wind’s share of US electricity generation to increase to 10% in 2021.

On a state level, Texas has the most wind turbine capacity with 30.2GW installed as of end-2020. In Iowa and Kansas, wind surpassed coal as the state’s top electricity generation source in 2019, with a share in the electricity mix of 58% and 48%, respectively, last year.

The average US home uses 867kWh per month, according to the EIA, while the mean turbine capacity is 1.67MW (US Wind Turbine Database). At a 33% capacity factor, that average turbine would generate over 402,000 kWh per month—enough for over 460 average American homes. To put it another way, the average wind turbine generates enough energy in 94 minutes to power an average US home for one month.

 

 

Wind Technology

Approximately 2% of the solar energy striking the Earth’s surface is converted to kinetic energy in wind. Wind turbines convert the wind’s kinetic energy to electricity without emissions. Average annual wind speeds of 6.5m/s or greater at 80m are generally considered commercially viable.

Offshore winds are generally stronger than on land and capacity factors are higher on average (expected to reach 51% by 2022 for new projects), but these farms are more expensive to build and maintain. Offshore turbines are currently placed in depths up to 40-50m (about 131-164ft), but floating offshore wind technologies could greatly expand generation potential as 58% of the total technical wind resource in the US lies in depths greater than 60m.