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Offshore wind projects, i.e. wind turbine installations out at sea – increasingly in substantial water depths, have emerged as a significant source of copper demand. During the last years significant developments have been made with rotor diameters increasing from 80m in 2005 to 164m in 2018.
Off-shore wind is interesting because wind speeds are generally higher and steadier than land-based installations and the permitting process tends to be simpler and more promising due to the limited impact on humans and nature. Today, many states see wind power as a valid alternative to reduce greenhouse gas emissions from the existing power supply. Within 5 years the installed off-shore wind capacity has more than doubled and it is projected that this growth will continue. By 2050 well over 400 GW could be produced from large offshore wind farms.
There are however different scenarios that estimate 200 to 500 GW until 2030 – in any case, the importance is apparent and offshore wind will play a major role in the energy mix of the future. This has been supported by newly planned projects, such as the 30GW installation offshore USA and further projects in Asia and the North Sea.
Offshore wind and wind generated electricity in general has emerged as a relatively large consumer of copper on a global level. With the rapid development of technology and engineering capabilities towards larger and more powerful wind turbines, the copper consumption per MW of installed capacity has risen rapidly. While land based installations consume roughly 5 tons of copper per installed MW, large, offshore installations consume today up to 15 tons per MW installed capacity. This is the amount of copper that goes into the nacelles, cabling and substations.
If this rapid evolution in wind power generation continues, global wind farms will need anywhere between 3 to 7 million tons of copper by 2030. This corresponds to an annual consumption of about 300,000 to 700,000 tons or about 1-3% of the annual global copper demand. This corresponds to the output of the Grasberg mine in Indonesia, the second largest copper mine in the world. However, if we factor in the full wind capacity that is expected to be installed by 2030, the demand for copper will increase further. In the most progressive scenario, global copper consumption would be massively increased by about 5-8% per year driven by wind and solar.
This additional demand is significant and puts the global copper supply to a severe test, especially in view of the lack of alternative conductor technology.
We see great risks associated with the future global supply of copper and believe it will become increasingly difficult to source enough copper in the current price environment.
