The focus of the energy transition has thus far been to create a cleaner energy system, meaning reduced emissions of greenhouse gases. Renewable energy sources combined with electrification of end-user applications have been the key enablers. However, the new energy system will not only be cleaner, but also leaner. What does this imply? It means that less material will be needed to provide the energy services we need. The world currently extracts about 15 gigatonnes of fossil fuel every year, and a large share of this is transported around the globe. Coal, oil, gas, and chemicals constitute more than 40% of the materials moved by ships and trains. Moreover, the fossil fuel infrastructure – including casing steel, pipelines, ships, structures and processing equipment – constitutes more than 2.5 gigatonnes of steel alone.

As the world replaces fossil fuels, there is also a move away from having to produce energy at geological reservoirs – often in remote locations – towards producing energy closer to or exactly where it is needed. Moreover, electrified end-user applications are much leaner than similar applications based on fossil fuel. A motor 100 years ago typically produced 10 kW per tonne of engine weight. A combustion engine today produces about 1000 kW per tonne, while an electric motor can produce as much as 10 times more per tonne. Also, electrical heaters are leaner in size and weight compared to fossil fuel heaters. Further electrification of end-user applications will reduce the size and weight of these appliances directly, but also indirectly through leaner foundations and reduced need for pipes and storage systems. Moreover, China – through its extremely fast industrialization over the last two decades – has used more than half of the cement produced globally, while only representing 18% of the world’s population. Cement consumption in China is currently trending downwards. In sum, these trends will result in a leaner energy system while also improving energy security. For many, this may sound rather counter-intuitive, since a popular narrative in recent years has been that the green shift could be slowed due to lack of materials.

Our recent studies show that some materials, like lithium and copper, will see demand grow by a factor of between five and 10 over the next two decades, driven by material need for solar PV, wind turbines and batteries. In some cases, the processing capacities for these materials could be limited to a few nations, thus creating new challenges for energy security. But government stimuli could then work as a catalyst to build up capacities globally for many key materials. We have seen that the Inflation Reduction Act in the US is attracting investments and projects, with the EU’s Green Deal Industrial Plan trying to create positive new ‘economic gravity’ for low carbon and renewable solutions in Europe. Furthermore, Canada recently introduced its Investment Tax Credit package, transforming it into an attractive hotspot for renewable energy investments. These strong policy measures are making a real difference.

In the upcoming Rystad Talks Energy, we will focus on energy security in the midst of the energy transition, while putting the spotlight on Canada. We will also address the recent wildfires and outages in oil and gas production from Canada, representing more than 2.5% of global oil production. As always, the session will also include our regular market updates. Please make sure to register and join us for a great session under the heading “Supplying energy security”.

If you missed our recent nine-hour Energy Transition Marathon, you can still sign up to watch this on demand.