Projecting Critical Mineral Needs for India’s Renewable Electricity Transition

Backdrop

India has made significant commitments to reduce greenhouse gas emissions and reach net zero by 2070. This clean energy transition is essential for climate change mitigation efforts, the country’s energy security, and environmental preservation. At the 26^th Conference of Parties held in Glasgow, India presented five elements of its climate action strategy: installing a cumulative 500 GW non-fossil energy capacity by 2030; generating 50% of its energy requirements from renewable sources by 2030; reducing projected carbon emissions by one billion tonnes by 2030; reducing the carbon intensity of the economy by 45% by 2030, over 2005 levels; and achieving the target of net zero emissions by 2070.[1]

Several roadblocks to achieving these targets—as well as those for the net-zero goal—include accessing adequate investments, solving technical and operational challenges, and creating a just transition framework. Another imminent concern is ensuring resilient access to the requisite green technologies and raw materials necessary to manufacture them.

A World Bank report[2] highlights the mineral needs for various clean energy technologies and provides the global mineral demand projections until 2050. It states that “a low-carbon future will be very mineral intensive because clean energy technologies need more materials than fossil-fuel-based electricity generation technologies.” The report delineates the relative demand risks of cross-cutting minerals and concentrated minerals. Copper, chromium, and molybdenum are cross-cutting minerals used across various clean energy generation and storage technologies. These minerals face stable demand conditions. However, minerals like lithium, silicon, cobalt and manganese are concentrated only on one or two specific technologies and face higher demand uncertainty arising from future technological disruptions.

A 2021 IEA report[3] highlights that “the data shows a looming mismatch between the world’s strengthened climate ambitions and the availability of critical minerals that are essential to realising these ambitions.” The report adds that “while there is no shortage of resources worldwide, today’s supply and investment plans for many critical minerals fall well short of what is needed to support the accelerated deployment of solar panels, wind turbines, and electric vehicles.” Critical minerals, both primary and processed, are essential inputs in the production process of an economy whose supplies are likely to be affected due to the risks of non-availability or unaffordable price spikes.[4] Without access to these essential minerals, India’s, and the rest of the world’s, clean energy transition plans may face severe setbacks.

To understand the magnitude of the potential shortage of raw materials needed for India’s clean energy transition, the Centre for Social and Economic Progress (CSEP) is working on a paper that estimates the quantities of various critical minerals required to manufacture solar panels, wind turbines, battery energy storage systems, and grid infrastructure, in line with different energy transition scenarios to meet the net-zero emissions target. This paper extends CSEP’s earlier work[5] on projecting India’s mineral needs for green technologies. A new edition of Assessing the Criticality of Minerals for India, a precursor to this revised work on projections, was published in April 2023, which extended the earlier assessment of 23 minerals for India to 43, based on their economic importance and supply risks. It highlighted the minerals that were found to be the most critical for India’s economy.

In this blog write-up, we present our methodology and some of the preliminary findings on projecting the critical mineral needs for India’s clean energy transition.

Methodology

The steps followed to compute the critical mineral requirements for India’s green electricity transition are given in Figure 1.

Figure 1: Methodology for Projecting Critical Mineral Needs

For the electricity capacity scenarios, we rely on NITI Aayog’s India Energy Security Scenarios, 2047 (IESS), an open-source Excel-based tool that provides several energy policy scenarios and assesses the supply and demand of energy in the country till 2047.[6] Our study focuses on the renewable electricity capacity and required battery energy storage systems and grid infrastructure to facilitate the operation of the same.[7] We compute the annual addition in power capacity based on the scenario, accounting for the replacement of older decommissioned plants. We then examine the various technology options for each source and devise scenarios on technology trends based on available literature. Finally, the mineral intensities for each technology option for each electricity source are used to compute the mineral requirements. We also show how recycling reduces the need for virgin ores and metals, which may narrow the impending supply gap, and reduce greenhouse gas emissions.

We provide two or more alternate scenarios for each step in our methodology, each of which have an impact on the critical mineral requirements. The results indicate the total embedded mineral requirements in the respective sources, which may be produced in India or imported for processing, or embedded within the components for domestic assembly. The paper seeks to estimate the extent to which the technology supply chain will be indigenised over the next two decades, which would then provide estimates of the quantities of raw materials required.

Nevertheless, these preliminary findings indicate the magnitude of the critical minerals’ supply challenge ahead.

India’s Energy Transition Scenarios

India’s electricity generation mix has steadily shifted from fossil fuels to renewable sources.[8] Between 2019 and 2023, the capacity share of renewable energy sources (RES) increased from 22% to 30%, while the electricity generation share climbed from 9% to 13%.[9] However, while the shares of fossil fuels[10] in capacity and generation have dropped (to 57% and 73%, respectively), both have increased in absolute terms (Figure 2). India still relies on fossil fuels for its energy needs, with continued growth expected in coal power capacity till a likely peak between 2030 and 2035.[11] The remaining installed capacity comprises nuclear and large hydro sources, with respective shares of 2% and 11% in 2023.

Figure 2: Installed Capacity by Source

IESS provides users with four predefined scenarios and a fifth pathway for the net-zero transition. We use all five for our projections scenarios. The solar PV (including distributed solar PV) and wind (onshore and offshore combined) installed capacity scenarios are shown in Figures 3 and 4. Based on IESS, the installed solar and wind capacities in 2030 will likely be between 158-314 GW and 74-137 GW, depending on the chosen scenario. In the heroic effort scenario, around 49 GW would be needed from other non-fossil sources (such as small hydro and biomass) to reach the 500 GW target.

Figure 3: Solar PV Capacity Scenarios

Figure 4: Wind Capacity Scenarios

Mineral Projection Scenarios

Various scenarios have been considered to project India’s critical mineral needs for its clean electricity transition, such as for electricity capacity, lifespans of power stations, recycling rates, and future technology changes. The paper elaborates on the chosen scenarios and the rationale behind their selection.

Results

The following are excerpts from our preliminary results on the mineral requirements for solar panels, wind turbines, and battery energy storage systems. The mineral requirements are given in tonnes of metal for the five-year periods: from 2022-23 to 2026-27, up to 2042-43, and then to 2046-2047. The scenarios chosen are the net-zero emissions for electricity capacity and a base case for the rest. The demand projections for only select minerals are shown here, while the working paper will cover the various critical minerals required for the manufacture of clean energy technologies. The paper will also dive deeper into the results for select critical minerals and will include information on the mine production in order to contextualise the predicted mineral shortage. As many of these minerals are not found in India, there is an import dependence on them, in either their raw or processed forms. The pace of renewables capacity addition increases until the 2037-38–2041-42 period, reflecting the peak in mineral demand.

For solar panels, the demand for silicon and gallium is set to increase by 1.8 times in five years and 2.9 times in 15 years, compared to today’s requirements. In the base case for solar technologies, crystalline silicon (c-Si) cell solar panels remain dominant, so no major changes in the types of minerals are required. For wind turbines, zinc requirements are expected to rise 1.9 times in five years and 3.4 times in 15 years, over today’s levels, compared to the 2.8 and 5.4 times increase for neodymium (a rare earth element). The demand for minerals for the battery energy storage systems is set to pick up after 2027-28. Lithium and cobalt requirements would pick up 3.5 times within five years, and in 15 years, the increase would be 5.2 times higher than the 2027-28 levels.

Figure 5: Lithium Demand for BESS

Criticality Assessment

A critical minerals assessment quantifies the risks in the supply of minerals and their relative importance to the economy to identify the ones most vital to a country’s needs. This assessment typically underpins a multipronged strategy on securing resilient access to critical minerals. The most recent evaluation for India was undertaken by CSEP[12], and was one of the inputs to the Ministry of Mines report on the Identification of Critical Minerals[13]. Some mineral projections are shown in Table 1. The status of mineral production mentions if mining currently takes place in India, or if any resources/reserves[14] are available. The results of the CSEP criticality assessment (in terms of whether the mineral was found to have high economic importance, high supply risks, or both, that is, critical), and the Ministry of Mines report are also presented.

Table 1 Criticality and Projections of Minerals

Note: * indicates that the ratio is based on the requirements in 2037-38–2041-42 compared to 2027-28–2031-32.

The demand for critical minerals in the clean energy transition will rise manifold over the coming decades. Most of these minerals have been identified as critical by the CSEP and Ministry of Mines reports. For these minerals, especially those with no known domestic resources­­­­­­­­­­, mineral-wise strategies are required to ensure their robust access for India’s manufacturing needs and climate change mitigation ambitions.