The huge expansion of electricity grids requires a large amount of minerals and metals. Copper and aluminium are the two main materials in wires and cables, with some also being used in transformers. Copper has long been the preferred choice for electricity grids due to its high electrical and thermal conductivity. However, copper is over three times heavier by weight than aluminium and is more costly.
Copper is widely used for underground and subsea cables where weight is not a major concern and superior technical properties (e.g. corrosion resistance, tensile strength) are required. By contrast, aluminium is commonly used for overhead lines given its weight advantage. In some instances, aluminium is also used for underground and subsea cables.
Annual copper demand for electricity grids grows from 5 Mt in 2020 to 7.5 Mt by 2040 in the STEPS and to nearly 10 Mt in the SDS. Aluminium demand increases at a similar annual pace, from 9 Mt in 2020 to 12.8 Mt in the STEPS and 16 Mt in the SDS by 2040.
Minerals account for a considerable share in total investment costs for grids. Using average prices over the past 10 years, copper and aluminium costs are estimated to represent around 14% and 6% of total grid investment respectively.
One option to reduce raw material costs is to switch from copper to more affordable aluminium. If aluminium takes a higher share in underground and subsea cables, copper demand could be reduced by 3.6 Mt (down by a third) in 2040 while raising aluminium demand by 5.8 Mt (up by over a third).
Another option is to adopt HVDC systems more widely, which uses one-third less metal compared to AC systems and are capable of transporting more electricity. A wider uptake of HVDC systems could reduce combined demand for copper and aluminium in 2040 by 4 Mt (or 15%) in the SDS.
Source: iea org