981
Views
0
CrossRef citations to date
0
Altmetric
Articles

The impact of renewables on energy security

ABSTRACT

Energy security has taken a more prominent role due to the conflict in Ukraine. There are many considerations to energy security; however, recent events highlight that the availability of affordable energy will be considered paramount. A switch to renewable energy changes the issues related to energy security but does not necessarily ensure greater security. Renewables increase the need for minerals and threaten to alter the countries involved in energy security, not the international interdependence. Geopolitics will remain an important consideration for energy security and a switch to renewables is unlikely to eliminate this factor. Canada has the potential to play an important role in future energy security.

RÉSUMÉ

La sécurité énergétique a pris un rôle plus important en raison du conflit en Ukraine. La sécurité énergétique comporte de nombreux aspects. Cependant, les événements récents montrent que la disponibilité d'une énergie abordable sera considérée comme primordiale. La transition vers les énergies renouvelables modifie les questions liées à la sécurité énergétique mais ne garantit pas nécessairement une plus grande sécurité. Les énergies renouvelables augmentent les besoins en minéraux et menacent de modifier les pays concernés par la sécurité énergétique, et non l'interdépendance internationale. La géopolitique restera une considération importante pour la sécurité énergétique et il est peu probable que le passage aux énergies renouvelables élimine ce facteur. Le Canada a le potentiel pour jouer un rôle important dans la sécurité énergétique future.

Introduction

The world’s attention was drawn to Ukraine on February 24, 2022, as Russian troops began an invasion. This event created a number of global political consequences that includes a resolution by the United Nations General Assembly that demands an end to the Russian offensive in Ukraine and the imposition of sanctions against Russia by a number of countries including the United States, Canada and the European Union. The conflict has motivated some energy companies to end activities in Russia as a way of maintaining their Environment, Social and Governance values. Examples of this include: BP (Citation2022, February 27) announcing that it will end its relationship with Rosneft; ExxonMobil (Citation2022, March 1) to discontinue involvement in its Sakhalin project and make no new investment in Russia; and Shell (Citation2022, March 8) announcing its intent to withdraw from Russia. The outrage against Russia is so great that Germany canceled the already built Nord Stream 2 pipeline that had the capability to carry natural gas from Russia directly to Germany. The significance of canceling Nord Stream 2 is particularly interesting since it had the capacity to carry about 60 per cent of Germany’s annual natural gas needs.

The concern over the impact of the war on energy availability in Europe led the International Energy Agency (IEA) to publish 2 reports related to reducing Europe’s reliance on energy imports from Russia: IEA (Citation2002a). A 10-Point Plan to Reduce the European Union’s Reliance on Russian Natural Gas and IEA (Citation2002b) a 10-Point Plan to Cut Oil Use. The strategies proposed by the IEA rely on energy efficiency and conservation measures, switching to electrification, increased generation from wind and solar, and a switch to natural gas from sources other than Russia. Neither plan provides for a quick cessation of European reliance on energy from Russia.

Both Canada and the United States are among countries that have banned Russian oil imports. Europe has resisted outright bans of Russian oil and natural gas as they are currently too dependent and have no alternatives available in the short-term. EU sanctions have refused outright bans on Russian oil exempting oil delivered by pipeline and making exceptions for trade with intermediaries. Longer-term strategies to reduce this dependence along the lines of the IEA strategies are being debated. However, concerns over how sanctions will impact current energy markets remain, particularly in Europe. To date, sanctions have prevented some oil tankers from acquiring insurance while carrying Russian oil as reported by (Miller, Citation2022) and there were examples of oil tankers with Russian flags being turned away from ports (Latiff, Citation2022; Saul, Citation2022). Russia has threatened to use energy as a leverage point in international relations in response to the sanctions and the exclusion of Russia from international banking. These combined events and underlying concerns caused energy prices to rise rapidly. Oil prices increased from the range of US$70 to US$80 per barrel for Brent Oil at the end of 2021 to exceed US$120 per barrel in March of 2022 (EIA, Citationn.d.). European natural gas prices similarly increased to over US$40 per million British thermal unit (MMBtu) compared to roughly US$6 per MMBtu in 2021 (YCharts, Citation2022). North American natural gas prices have reached prices that have not been seen in over 13 years, ever since the unlocking of natural gas from shale.

The reaction to the war has spilled over beyond energy investments in Russia and has the potential to impact investments in other parts of the world. For example, there are news reports that a Chinese state-owned oil company CNNOC Ltd. is looking to divest from its assets in Western countries to avoid the potential impacts of future sanctions, likely over its desire to maintain ongoing investments in and relations with Russian (Reuters, Citation2022).

The conflict in Ukraine has clearly raised questions about energy security. I will explore some concepts of what energy security means. This will be followed by a brief discussion of the evolution of energy markets and the rise of energy security. I will then discuss the growing energy needs of humanity and what some of the forecasts suggest in terms of the requirements for raw materials. This will transition into a discussion of raw materials. I will then close with a discussion of what this suggests for Canadian public policy choices.

Energy security

Energy is an essential component of life. Our ability to live, breathe, move or think all require energy. We also rely on energy to make life easier and meet our needs for food, shelter and more complex needs. Energy powers our ability to stay warm or cool. Energy fuels our ability to move ourselves and things across distances that allow us to acquire things we need or get somewhere that we need or want to be. Energy enables us to grow, harvest, collect and process our food and then to store it and prepare it for eating. Energy allows us to conduct our work and leisure at times and locations that are flexible by allowing for artificial lighting, space heating and cooling, and mobility. We have grown comfortable, if not complacent, with reliable and affordable energy as a given most of the time. Much like the air we breathe or the water we drink we only think about energy when it is not readily available.

There is no consistently accepted definition of energy security. A simple definition of energy security might rely solely on ensuring reliable energy is available at reasonable prices. For example, IEA (Citationn.d.) defines energy security as the uninterrupted availability of energy sources at an affordable price. The IEA suggests that this has both a short-term and a long-term consideration. The short-term aspect is the ability to react quickly to sudden changes in supply and demand such as having sufficient energy to deal with a very hot or cold day or to deal with the unavailability of a large power generating station. The long-term aspects of energy security relate to having timely investments to ensure ongoing energy supplies while considering ongoing economic development and the environment.

This simple definition requires consideration of a number of these terms. What defines a reasonable price? Is it a portion of average household income? If so, how does it deal with the different energy consumption patterns of wealthy versus low-income households? Is it constrained to a portion of an industry’s total costs or margins? What is needed to achieve reliability of energy? Should reliability be measured by the amount of time that energy is available or does the time or situations that it is available matter? For example, is it reasonable to consider energy reliable when it is not available at night or whenever the temperature drops below freezing? How about during a storm or during a heat wave?

Metcalf (Citation2014) explores some of these questions and suggests that questions about affordability are often contextual. Metcalf contrasts the view of affordability between the experience of Europeans that were paying US$8 per gallon for gasoline in 2013 while the US was paying US$4 per gallon at the same time. Metcalf provides the definition used by the US Congressional Budget Office (Citation2012) that energy security is the ability for households to accommodate disruptions in supply in energy markets. According to Metcalf, this definition emphasizes the relation between energy access and the activities of households and businesses specifically with respect to energy disruptions.

An examination of energy security requires consideration of the energy itself, how it is produced and how it gets to consumers. We rely heavily on large power generation facilities and key facilities to produce or import energy. The power lines, ports, shipping lanes, rail systems and pipelines that connect these essential sources of energy with us are also of note. These specific locations are often deemed of strategic importance. Often the computer systems that control this infrastructure are deemed critical as well and are required to be set up on specific networks that are isolated from the world-wide web to prevent them from being hacked. Of course, even these are exposed to some vulnerabilities as demonstrated when a ransomware attack forced the shutdown of the Colonial Pipeline system in the United States. Although the cyber-attack did not impact the equipment related to oil flows, it interrupted billing and thus forced the pipeline to stop flowing while it sorted these billing issues out. The related pipeline outage caused the US Government to get directly involved with the Department of Energy leading the work of 7 fellow departments and agencies (United States Department of Energy, Citationn.d.).

Tankers carrying large volumes of oil or natural gas become potential risks as do pipelines and transmission lines. This is evidenced by the attention that is paid to key bottlenecks in the world oil market. US Energy Information Administration (Citation2017a, Citation2017b) identifies the Straits of Hormuz and Malacca and the Suez Canal as some of the busiest oil transportation corridors in the world. These areas are considered highly strategic for the energy that is sourced and transported through them. For example, in 1980, US President Jimmy Carter declared that

an attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force. (American Foreign Relations, Citationn.d.)

Energy security is, therefore, an international concern.

Bradshaw (Citation2009) highlights some of the reasons that concepts around international energy security have evolved. Initially, international energy security was about the relationship between the needs of the major consuming countries of the United States and Western Europe and major oil producing countries. The rise of China and India as major consumers is altering this pattern and has made energy security a global concern not just for Western Democracies. Bradshaw identifies that other considerations beyond reliable energy at a reasonable price have entered the discussion. Equity, social justice, human rights, international relations and environmental impacts also influence energy security. Concerns about emissions and climate change now permeate most discussions about energy policy such that peak oil production has come to refer to the concern about stranded reserves of oil instead of shortage of oil resources.

Sovacool and Brown (Citation2010) identify availability, affordability, energy and economic efficiency (conservation) and environmental stewardship as measurable dimensions of energy security to create a measure of energy security that is comparable over time and across jurisdictions. The evaluation along these dimensions includes underlying values according to Sovacool and Brown. For example, independence, diversification and reliability underlie availability; equity underlies affordability; innovation, resource custodianship and minimization of waste underlie efficiency; and sustainability underlies environmental stewardship.

Koçaslan (Citation2020) identifies that globalization of energy has meant that there is no single accepted measure of energy security. The variant needs between countries means that measuring energy security must consider multiple facets if comparisons are to be made. Energy exporters and importers will necessarily require different considerations as will those that have substantially different energy mixes.

Kosowski and Kosowska (Citation2021) state that issues related to human rights, personal security energy justice and sustainable development have also become important. However, they argue that accessibility and affordability are often the most important dimensions when standard evaluations of energy security are undertaken because of the impact they have on the other dimensions. This seems consistent with the actions going on currently in Europe where issues of ensuring energy will be available at reasonable prices have prompted Europe to exclude energy from the sanctions and even has some politicians suggesting that increased coal consumption be accepted as a response to lowering dependence on Russia. A statement by Frans Timmerman, the Executive Vice President of the European Union responsible for the European Green Deal illustrates this point. In response to an increase in coal consumption in the Union, Timmerman is quoted during an interview on the BBC Radio 4 on March 3, 2022, as saying, “There are no taboos in this situation” (Mathiesen, Wanat, & Weise, Citation2022).

Energy security remains focused around availability and affordability. These notions of availability and affordability though are dynamic in nature. Energy is so important that immediate access to affordable energy trumps all other considerations as is evidenced in the quote from Timmerman. Many of the additional considerations that are mentioned around longer-term availability and sustainability, human rights, social justice, and environmental impacts are important albeit secondary considerations.

Energy trade and resources as a geopolitical consideration

In peaceful times, the prevalence of trade has in general enhanced energy security globally. Countries have benefited from the opportunity to utilize varied sources of energy to meet the goals of reliability and affordability in ways that have greatly expanded jointly both energy use and economic prosperity.

While energy consumption and economic growth are no longer as directly tied as they have been historically in developed economies, the relationship in the developing world remains strong. US Energy Information Administration (Citation2021) forecasts in its International Energy Outlook that energy intensity, measured as the amount of energy per unit of gross domestic product, will continue to decline over the next few decades. Sharma, Smeets, and Tryggestad (Citation2019) suggest 4 drivers of this trend of decoupling the rate of economic growth and energy demand: a transition towards service economies from industrial based ones, continued technological improvements and behaviors that increase energy efficiency, a rise in electrification, and an increasing amount of energy from renewables that do not require an inefficient conversion to electricity.

A common trait for most of the large economies of the world is that they are net energy importers instead of being completely reliant on domestic energy sources. Over reliance on a single form of energy could easily be seen as a weakness for energy security, just as a lack of diversification is considered risky in other aspects of life. It is a well-known proverb to avoid keeping all of our eggs in a single basket. For instance, what happens when the wind doesn’t blow or the sun doesn’t shine? What happens when a large thermal plant needs maintenance? What happens if a pipeline ruptures or a power line is damaged? Some of this can be mitigated through energy storage of various types from short-term apparatus such as batteries to longer-term ones like stockpiles of oil or coal. Being too reliant on a single foreign supplier is just as problematic as being too reliant on any single source of our energy. According to BP (Citation2021), global trade in oil reached an all-time high of 70 million barrels per day in 2019, that for natural gas reached an all-time high of 990 billion cubic meters in 2019, and coal trade peaked in 2018 at 36 exajoules.

shows the amount of energy produced in the world’s top economies by energy source as a percentage of consumption in each of the countries. Countries with production that exceed 100% are net energy exporters. Conversely, countries that have energy production less than 100% are net importers. Canada is uniquely positioned as the only large economy that is an energy exporter, with the US effectively producing all its own needs. This is a relatively new situation for the US Up until the last few years the US had also been highly dependent on imports until the unlocking of oil and gas production from shale deposits increased its production substantially. China produces about 80 per cent of its energy needs and most of this is coal. Japan, imports 87 per cent of its energy needs. Europe relies on energy imports for roughly half of its needs. Of the world’s 20 largest economies, only Canada (10th largest), Russia (12th largest), Australia (14th largest) and Saudi Arabia (19th largest) have been consistent energy exporters.

Figure 1. 2020 Domestic supply by energy source. Source: BP (Citation2021) and author’s calculations.

Figure 1. 2020 Domestic supply by energy source. Source: BP (Citation2021) and author’s calculations.

Another key insight from is the amount of energy being generated by source. Currently none of the major economies generates a significant amount of its energy needs through renewables. The leading countries of Germany and the United Kingdom manage to source roughly 10 per cent of their energy needs from wind. The leaders for solar, Germany and Japan, currently meet 4 per cent of their energy needs from solar.

The fact that almost all large economies are energy importers has important implications. The first of which is that these economies, and by extension the global economy is dependent on energy sources that can be transported readily. For example, it would be very challenging to attempt to import vast amounts of electricity because of the costs and complexities involved in long distance electricity transportation. This all but eliminates the likelihood of turning to solar or wind power from a distant jurisdiction to meet domestic energy needs. A second consideration is that sourcing energy is a critical consideration. It becomes important where that energy is coming from as the current situation with Russia and history suggest. It also matters how that energy is transported and the route taken to transport it is also an important consideration.

Energy security, therefore, has a significant international and geopolitical context. Colgan (Citation2013) suggests that oil has a very direct influence on international conflict:

Oil fuels international conflict through eight distinct mechanisms: (1) resource wars, in which states try to acquire oil reserves by force; (2) petro-aggression, whereby oil insulates aggressive leaders such as Saddam Hussein or Ayatollah Ruhollah Khomeini from domestic opposition, and therefore makes them more willing to engage in risky foreign policy adventurism; (3) the externalization of civil wars in oil-producing states (“petrostates”); (4) financing for insurgencies – for instance, Iran funneling oil money to Hezbollah; (5) conflicts triggered by the prospect of oil-market domination, such as the United States’ war with Iraq over Kuwait in 1991; (6) clashes over control of oil transit routes, such as shipping lanes and pipelines; (7) oil-related grievances, whereby the presence of foreign workers in petrostates helps extremist groups such as al-Qaida recruit locals; and (8) oil-related obstacles to multilateral cooperation, such as when an importer’s attempt to curry favor with a petrostate prevents multilateral cooperation on security issues. These mechanisms can contribute to conflict individually or in combination.

It would be very easy to replace oil in Colgan’s argument with energy more generally. Additionally, it is quite reasonable to generalize from energy security to overall security. Most of the equipment that is used by militaries is energy intensive. Mintz and Wallace (Citation2022) cite US government data to illustrate how energy dependent defense spending is. “According to the 2005 CIA World Factbook, if it were a country, the US Department of Defense would rank 34th in the world in average daily oil use, coming in just behind Iraq and just ahead of Sweden” (Mintz & Wallace, Citation2022, p. 5). How plausible would it be to operate a modern military without energy?

Award winning author Daniel Yergin has published several books that detail how oil intermixes with global politics. Yergin (Citation1991) attributes energy as the main driver of Japan becoming involved in World War II and as the geopolitical tool used Oil Producing and Exporting Countries (OPEC) in response to foreign policy disputes that led to oil embargos in the decade of the 1970s.

Scott (Citation1994) provides a history of the IEA as a response to energy security. The removal of close to 5 million barrels per day of oil production in 1973 from the OPEC embargo caused significant impacts to the global economy. Line-ups for gasoline became a common occurrence. The Organization for Economic Cooperation and Development (OECD) countries were in a panic. A plan was needed for how to deal with the instability that had been created by the decline in oil production.

During the Middle East War crisis of 1973–1974, the main industrial countries became painfully aware of their vulnerability to the new economic power of the oil producer countries. For the industrial countries, the sting in that crisis derived from their sudden need to respond to the oil embargo by a number of Arab producers and from the price spike that took oil prices rapidly to historic and damagingly high levels. Perhaps even more troublesome, however, was the realization that, having accepted for some years the short-term luxury of growing oil import dependence, the industrial countries were themselves largely responsible for the very predicament in which they suddenly found themselves. (Scott, Citation1994, p. 19)

According to Scott (Citation1994), the crisis in part was caused by industrialized countries becoming complacent due to the availability of oil from the Middle East. Excessive use and underdeveloped energy conservation measures contributed to the energy crisis that was unfolding. The IEA was created by OECD countries in response to the energy crisis of the 1970s. Although born of the oil crisis, the IEA was set up to address energy and energy security more broadly. Information sharing and cooperation among members and with the major oil companies was a key element of the IEA. The IEA was given a mandate for all major energy sources, energy conservation and the availability of alternative sources of energy.

We can see definite parallels with the current situation in Europe. European countries allowed low-cost supplies of energy, natural gas in particular, from Russia to limit the diversity of energy supplies. Domestic natural gas resources have not been developed in countries such as the Netherlands and Poland. Policies that supported renewable power generation did not include provisions to ensure sufficient storage when local generation exceeds local demand or alternatives for when local wind and solar conditions do not generate sufficient power.

The history of the oil shocks of the 1970s combined with the fact that the world’s major economies are energy import dependent has meant that the drive to find alternatives to existing oil supplies has been a central focus of major economies for decades. Some of these efforts have been focused to find new oil sources; however, more effort has been directed on non-oil alternatives. Incentives and regulations requiring renewable fuel percentages have been used to induce renewable energy like solar, wind and biofuels. Energy efficiency measures such as building standards and vehicle efficiency requirements in the form of corporate average fuel economy (CAFE) standards have also been implemented to reduce consumption.

Environmental considerations to energy security gained momentum with the Earth Summit that took place in Rio de Janeiro in 1992. The United Nations Framework Convention on Climate Change (UNFCCC) took place in Rio. The Framework specifically noted that human activities were having an impact on the concentration of greenhouse gases in the atmosphere and set out to monitor and slow this. This was followed five years later by the Kyoto Protocol that established emission reduction targets. Since 1997 there have been annual meetings of the Conference of the Parties (COP) to the UNFCCC to reduce global emissions. Energy, both the production and consumption of it, is responsible for the largest share of emissions at roughly 73 per cent of global emissions (Ritchie & Roser, Citationn.d.). The recognition that energy was having an impact on sustainability did not create, but instead only added to the motivation to improve energy efficiency and find alternatives to hydrocarbons to ensure energy security.

Energy efficiency has been a critical plank of energy security dating back to the 1970s. There are still gains to be made from efficiency measures. The lockdowns that were experienced in 2020 demonstrated that it is possible to live with less travel. Energy conservation measures feature prominently in the IEA’s 10-point plans to reduce oil and natural gas. However, there are limits to the effectiveness of efficiency as the solution to energy security. It is widely observed that as energy efficiency measures increase, so too does the consumption of energy. Binswanger (Citation2001) explains the rebound effect that efficiency improvements typically result in a reduction in resource use that is frequently less than expected. Energy efficiency works to make energy less costly relative to the output that it creates. This serves to increase the demand for energy and hence its consumption. Real world examples of this can be seen in things like passenger vehicles. Linn (Citation2016) identifies that increased fuel economy standards for vehicles have not resulted in the expected fuel savings. Although vehicles have become more fuel efficient over time, they have also become larger and heavier, and the distance traveled has increased. All these factors have eroded the efficiency gains from fuel economy standards.

Fifty years of efforts to improve energy security have made only modest changes. The major economies of the world remain highly dependent on imports of oil and gas to meet their energy needs.

Renewables as a partial solution

There is a popular notion that renewables such as solar and wind power are the key to future energy security. Although this may ultimately prove correct, there are many considerations to explore. Questions persist over the lack of technological solutions for certain sectors. Another critique of renewables relates to intermittency and, therefore, their reliability. Other issues to be resolved relate to ongoing and perhaps increased international dependence.

Complete reliance on renewables requires technological solutions in some aspects of society such as long-distance travel. For example, there are no reasonable alternatives to jet fuel for aviation at present. Similarly, ocean-based freight is currently dependent on diesel and fuel oil. Industrial heat processes for products like cement and metal smelting also are difficult to electrify on a cost-effective basis. For processes that can be electrified such as rail transport, heating and cooling of buildings, land-based freight, and passenger vehicles there is a requirement for an expensive and time-consuming replacement/retrofitting of the existing equipment. The electrification of cars and trucks additionally requires the storage of that electricity in batteries.

Fritsche et al. (Citation2017) prepared an analysis for the International Renewable Energy Association (IRENA) that estimates the amount of land use required to generate power. Nuclear, natural gas, and coal tend to be the least intensive for generating power. IRENA estimates that nuclear power requires 0.1 cubic meter per megawatt hour (MWh), and natural gas and underground coal require 0.2 cubic meters per MWh of power generated. Wind is estimated to require 1 cubic meter of land and solar requires 10 cubic meters of land to generate a MWh. This makes wind 5 times and solar 50 times more land intensive than traditional natural gas or coal fueled electricity generation according to Fritsche et al. As noted earlier, solar and wind only comprise about 4 per cent of global energy supply. As solar and wind generating capacity increase, the land use considerations will become more important over time. This will create its own set of energy security related issues.

Intermittency is another consideration for renewables. The sun only shines certain hours of the day, and the effectiveness of solar panels is impacted by weather such as when the sun is obscured by clouds. Similarly, wind turbine effectiveness is impacted by wind speeds that fluctuate through the day and with weather patterns. This intermittency necessitates some form of backup power to ensure reliability. This back-up can take the form of other methods of electricity generation such as thermal power plants, leaving the existing reliance on hydrocarbons, or it can be achieved through energy storage. Energy storage in turn requires some form of a battery that makes it dependent on minerals.

Europe has had some success replacing oil and gas with renewables. Data taken from BP (Citation2021) show that wind and solar generation have increased to 24% of the electricity generated from 16% only 5 years ago; however, this increase has primarily been through the replacement of coal not natural gas. Natural gas consumption for electricity also increased over this time frame in Europe. Renewables will continue to expand in electricity; however, they are inhibited by a couple of large stumbling blocks. Many of the easy transformations to electrification have already taken place. There are still gains to be made in swapping from internal combustion engines to electric vehicles. This is happening in the passenger vehicle market although it is not clear that electricity grids are keeping up with the demand that will be placed on the wires of local transmission systems. We know that it is not easy to secure public support to build new transmission lines. Electrification of other sectors and activities such as large industry, rail, heavy freight, and aviation is still slow and awaiting technological developments to become compelling.

Ogurek, Krzemień, & Kaminski (Citation2019) argue that policies in Germany aimed at increasing renewables have decreased energy security by increasing the amount of energy imports. Germany has focused on increasing electricity generation capacity from wind and solar and closed nuclear power generating stations. The result has been an increased reliance on electricity imports from its neighboring countries. This is due to the intermittency of solar and wind power paired with the inadequate efforts aimed at increasing energy storage.

Smil (Citation2020) states that Germany has almost doubled its renewable generating capacity from 121 gigawatts (GW) to 218.1 GW, however, the actual power produced from renewable sources only increased by 5 per cent; 607 terawatt hours (TWh) in the year 2019 compared to 577 TWh in 2000. According to Smil, the renewable generation in Germany only operated 20 per cent of the time requiring almost complete redundancy in its power generation.

Increased electrification of energy systems will require increased amounts of minerals. Copper is required for the additional power lines for electrification and in the power generators themselves since these generating systems are less densely constructed. Rare earths are required as part of the solar panels and wind turbines as well as within the batteries. Metals such as lithium, nickel, and cobalt are the leading components of batteries. IEA (Citation2022d) estimates that each electric vehicle requires over 200 kilograms (kg) of minerals predominantly copper, nickel and graphite compared to internal combustion vehicle requirements of less than 40 kg. Similarly, solar generation requires close to 7000 kg of minerals mainly copper and silicon per megawatt; wind generation over 10,000 kg of minerals per megawatt of capacity mainly copper and zinc; compared to roughly 1000 kg of copper for a megawatt of natural gas fired generating capacity.

These additional minerals required for renewable energy systems simply alter the countries that energy security relies upon.

Compared with fossil fuel supply, the supply chains for clean energy technologies can be even more complex (and in many instances, less transparent). In addition, the supply chain for many clean energy technologies and their raw materials is more geographically concentrated than that of oil or natural gas. This is especially the case for many of the minerals that are central to manufacturing clean energy technology equipment and infrastructure. (IEA, Citation2022d, p. 32)

taken from the IEA (Citation2022d) illustrates this point very clearly. When oil is replaced with renewables, China replaces the United States, Saudi Arabia, and Russia as the largest supplier. The largest oil producers represent less than 20 per cent of the market in the global oil market. For natural gas the picture is very similar although the shares of the largest players edges slightly over 20 per cent. When considering the minerals required for renewables and electrification of the economy though the market power is much more concentrated. China controls between a third and 90 per cent of mineral processing. Additionally, the extraction of cobalt, lithium, and rare earths is each highly concentrated with a single country representing more than half of current global production.

Figure 2. Share of top three producing countries in the production of selected minerals, 2019 (IEA, Citation2022d, p. 13).

Figure 2. Share of top three producing countries in the production of selected minerals, 2019 (IEA, Citation2022d, p. 13).

The IEA (Citation2022a, Citation2022b, Citation2022c) identifies that there are both similarities and contrasts that mineral security poses relative to oil security. Interruptions of both can have far-reaching consequences like price spikes and disruptions in supply. However, unlike oil, minerals are required only for the construction of the system not its ongoing operation with the exception of ongoing maintenance. Therefore, an interruption in mineral supplies has limited impacts on existing consumers compared to an oil supply disruption that necessarily impacts existing users. Disruptions in mineral supplies will, however, delay the speed of an energy transition. Inconsistency in mineral supply could easily be seen to result in energy systems that continue to use and expand hydrocarbon use to meet ongoing system demand. Therefore, the IEA suggests that lessons learned from oil security need to be applied to mineral security due to the impact that shortages can have.

Canada could play a bigger role in international energy security. Expanding the production of hydrocarbons is a well understood opportunity. Less well considered though is the potential impact that Canada could have on mineral markets. Canada has abundant potential for minerals. Natural Resources Canada (Citationn.d.) estimates the value of mining in Canada in 2020 to be roughly CAD $44 billion. Exploration across Canada is underway to find and develop minerals. Canada’s vast territory offers significant potential for mineral discovery and development. Canada is the world’s sixth largest producer of nickel and the 4th largest exporter of copper. Additionally, there are several proposed projects to produce lithium in Canada.

Increasing reliance on renewable energy brings with it additional considerations that are often overlooked by proponents of switching from hydrocarbon energy. Wind and solar energy increase the need to resolve issues related to intermittency and reliability. Additionally, further consideration of the minerals required for renewables is required as is the geopolitical impacts of the current concentration of production and processing of these materials.

Conclusion

Renewables do not appear to solve the issues of energy security. A transition to an economy that is entirely reliant on renewable energy is decades away from occurring. IEA (Citation2021) suggests that hydrocarbons will still represent roughly a third of the energy mix in 2050 in its most ambitious scenario for renewables. This scenario meets targets required to maintain greenhouse gas emissions at a level that limits warming to 1.5 degrees Celsius. Other scenarios examined forecast hydrocarbons as the main source of energy still in 2050.

A transition to renewables will further concentrate the countries that are critical to energy supply, as shown in , and therefore, is as likely to increase the geopolitical risks associated with energy as opposed to reducing these risks. Comparing renewables on the dimensions of affordability, accessibility, equity, and sustainability shows that renewables have some ground to cover to replace hydrocarbons. Although studies such as IRENA (Citation2022) that show renewables to be cost competitive with coal, oil, and gas, these studies compare an energy source that is 6 per cent of the global energy mix with ones that represent 85 per cent of the mix. These cost comparisons are often made for particular niches of the energy market as opposed to the entire market. Scaling renewables to completely replace hydrocarbons will have many impacts that are yet not understood. It is unclear how available the minerals required to achieve this transition will be. It is, therefore, premature to state whether renewables will or will not impact the affordability of energy. Similarly, it is not known what the impact on land use or water use will ultimately be or whether this transition to renewables will be seen as sustainable longer-term.

Switching from dependence on oil and gas to a reliance on renewable energy does not eliminate international considerations of energy security and dependence on foreign interests. In contrast it magnifies them. Exner-Pirot (Citation2022) articulates the argument very well

The public, and indeed most policy-makers, have not yet grasped that, in practice, a low carbon energy transition requires shifting from the extraction of fossil fuels to the extraction of metals. The painstaking task of converting wind, sun and water into electricity that can be transported, stored, and dispatched on demand is unavoidably material-intensive. It needs transmission lines, magnets, turbines, generators, and batteries. It needs steel, aluminum, copper, lithium, graphite, nickel, cobalt, manganese and rare earths.

Energy security, therefore, remains an international issue. Canada is uniquely positioned among major economies as a net energy exporter. Canada is well endowed with both traditional hydrocarbon resources and with opportunities to develop minerals that are important to the growth of renewable energy systems. As such, Canada should continue to bolster international energy security by the continued development of its natural resources.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Matthew Foss

Matthew Foss has 20 years of experience in the Canadian energy industry and is an Executive Fellow at the University of Calgary's School of Public Policy focused on extractive resources. Matthew recently served as the Chief Energy Economist for the Alberta Government where he was responsible for assessing the value of Alberta's energy resources, designing Alberta's oil and gas royalty formulas, programs, features and incentives, forecasting oil and natural gas prices and energy revenues, and advising Alberta on energy markets and related policies, strategies and investments. In his career with the Alberta Government he has led teams responsible for advising on market access, energy investment competitiveness, petrochemicals and refining policies, pipeline tolling and other regulatory matters, and the design and evaluation of royalty and fiscal frameworks. He has frequently provided presentations to international delegations and at international conferences. Matthew has a Master of Arts in Economics and a Bachelors of Arts First Class Honours in Economics both obtained from the University of Calgary.

References

Reprints and Corporate Permissions

Please note: Selecting permissions does not provide access to the full text of the article, please see our help page How do I view content?

To request a reprint or corporate permissions for this article, please click on the relevant link below:

Academic Permissions

Please note: Selecting permissions does not provide access to the full text of the article, please see our help page How do I view content?

Obtain permissions instantly via Rightslink by clicking on the button below:

If you are unable to obtain permissions via Rightslink, please complete and submit this Permissions form. For more information, please visit our Permissions help page.