While the UK government’s Clean Power 2030 mission aims to secure domestic energy supplies, achieving that goal will require global participation in the supply chain.
This is particularly true for crucial minerals, essential components of most renewable energy technologies, and a group of raw materials that are not plentiful in Britain.
This goes beyond the remit of the Department of Energy Security and Net Zero (DESNZ). Fortunately, as noted in an article from last week, the Clean Power 2030 target is one of the clearest priorities on the government’s agenda. But for developers operating in Britain, it can be unclear where responsibilities are divided.
At Solar Media’s Clean Power 2030 Summit, hosted in London from June 30 to July 1, there was a fireside chat: ‘Critical minerals and geopolitics: securing essential inputs‘, will elaborate on this.
Joel Watson, Head of Geopolitical Strategy, International Critical Minerals Team at the UK Foreign Commonwealth & Development Office (FCDO), will take part in that conversation. Before the event he spoke with Solar energy portal on how the global supply chain for critical minerals impacts the Clean Power mission.
View the full agenda for the Clean Power 2030 Summit and buy tickets be present at the event website.
Solar Power Portal: What is the FCDO’s role in securing the supply of crucial minerals for Britain, and how does that work interact with the work of DESNZ and other government departments?
Joel Watson: The State Department’s role in critical minerals is interesting. The critical minerals policy is coordinated by the Department for Business and Trade (DBT); they are responsible at cabinet level for policy on crucial minerals. But everything that has an international perspective automatically has an interest for the Ministry of Foreign Affairs; we are at the forefront of broader international relations in critical minerals. DBT has created the strategy, a cross-government strategy with important domestic objectives, but also important international work around building relationships that go beyond just the trade side of things.
Where the State Department comes into play, and plays a much larger role, is on issues such as corporate responsibility standards and ESG. We also examine the development side of critical minerals. So one of our mantras is about not wanting to repeat the mistakes of the past in mining in emerging markets and developing economies. We want to ensure that these resource-rich countries maximize the economic and development benefits of their natural resources.
Now Britain is in a relatively interesting position because our demand for raw minerals is a low percentage of global demand. We don’t go into these countries and say, yes, we’ll give you X millions or billions of pounds for this project, and in return we want Y% of the offtake to go to British companies.
The critical minerals strategy actually talks about the UK supply. We go wider than that when we talk about global supply, simply because UK demand is small as a percentage of total demand, so we can’t make a big difference on our own. Where our difference comes is through demand aggregation platforms; that has been our (FCDO) approach. The country has been 100% supportive of the critical minerals strategy and what’s in the strategy, but the international side is broader, so it’s not just limited to trade.
We are not following the same route that the DBT should follow, that it is all about trade wins. For us, this is about the bigger picture, it’s about ensuring that the global market for copper, for example, can expand and that global copper refining can happen at a faster pace and in a more diversified way. I’m sticking with copper because I think it is most relevant for the energy transition: without copper there is no energy transition.
That’s one of the things I emphasized to the team. If the energy transition does not get underway, there will be no net zero. And if there is no net zero, then the planet is in big trouble because we will miss critical climate tipping points.
Despite doing a crucial mineral job, which some people say is against environmental interests, I am actually a staunch supporter of the climate.
While much attention is being paid to sourcing crucial minerals for battery energy storage and renewable generation technologies, there is also a huge need for grid infrastructure. To what extent does the approach pay attention to the grid?
I think there’s been a disconnect between the need to build networks and why we do it, and what downstream looks like, with less awareness that a copper shortage is coming. Besides everything else, I think copper will be the major brake on the expansion of the electricity grid.
If you think about copper in particular, the International Energy Agency (IEA) predicts that we are heading for a global shortage by 2035, with 80% of copper demand going to be met by supply, and that includes recycling, so 20% of demand will go unmet.
So the concept of a fair or just transition, in my personal opinion, goes out the window because it will be more a matter of who can afford the copper in 2035 because there will be such a high demand for it. In any case, the expansion of the electricity grid will be slower in certain places.
Copper is of great importance for the future economy.
An important point of attention within the Clean Power 2030 objective is energy security, which is achieved through a supply that is as domestic as possible. Does that conflict with the work you do on a global scale? Is it possible to ensure that Britain has enough influence to secure the necessary access and share in that global supply, without becoming overly dependent on other countries?
Every government thinks about energy security and security of supply. Currently the UK government is not purchasing critical minerals; we don’t have a stockpiling regime like some other countries. The US has a proven stockpiling regime. China has a stockpile regime in which the state buys minerals and releases them on the open market or to preferred suppliers.
So our position is that the government is not purchasing critical minerals, but we encourage every company to look at their supply chain and be aware of how their supply chain could be affected by mineral shortages.
What we’re trying to encourage is that companies do their own audits all the way down the supply chain. Many British companies are doing that, but some still don’t have the memo on it, and the expectation is that the government will bail them out. I don’t think the government will ever be in a position to bail them out, and neither should we necessarily.
To what extent does the responsibility for securing supply chains lie with the private sector, and is this borne out by the current policy environment?
I think current policy positions put a lot of pressure on the private sector to do this. The fact that we do not have storage regimes for many of the minerals means that a large part of our demand is for embedded products rather than the raw materials. As you know, we currently do not make solar panels. So if you’re a company that installs solar panels, you think about where your panels come from – and the answer is almost certainly China.
What I’m talking about to illustrate where Britain fits into the market is thinking about a loaf of bread. Britain wants to buy a loaf of bread, and we want to buy that bread in an open market that deals transparently and fairly, and we want to buy that bread at the best price available, which is probably the cheapest price. But we want to be sure of its quality, and we want to be sure that the wheat or the flour wasn’t harvested using child labor and so on.
We want to buy the finished product and we want to have the choice to buy it in five or six places in the world market so that we don’t have to worry about getting wheat, yeast and water ourselves because that’s all being moved abroad. What we need to worry about is making sure that the five or six bakers worldwide that we want to buy that bread from have the wheat, the yeast and the salt and that they look at their supply chain, because otherwise we will only end up buying a loaf of bread from one supplier, which inevitably means costs go up.
Now there are some small artisan bakers who bake their own small loaves of bread. It is up to them to get their input. It is not the government’s responsibility to provide flour and salt. What we will do is do our best to ensure that they can source the raw materials in an open and transparent market.
The FCDO’s objectives are necessarily longer term than 2030, but is it so long term that the more immediate issues are not in your thinking?
There are no quick fixes for critical minerals, there are no cheap fixes and there are no easy fixes. Everything takes time, everything costs money and everything is difficult to deliver.
Analysis of mines commissioned in 2020-2023 shows that lead times have extended to approximately 17.9 years on average, due to longer exploration, permitting, financing and construction phases. The IEA regularly summarizes this as “between 15 and 20 years” for new mines, and around 17 years for copper in particular, when explaining why supply is struggling to respond to the growth in energy transition demand.
What we’re trying to do in government is make sure that they do it in the most responsible way, and that where we can encourage them to do it in the best way, we will. We’re working with the likes of the Church of England Pensions Board, Britain’s largest investor in ethical mining, to see how they’ve created a global mining waste institute in South Africa.
It’s really hard to change because of the dominance that China has in the market. It is difficult to change that in the short term.
