Copper, lithium, nickel and cobalt: According to a study, rising prices for the raw materials required in wind turbines, solar systems and electric car batteries could slow down the energy transition in Germany.

Due to the sharp increase in demand, the prices for the raw materials mentioned are likely to peak around 2030 and remain there for years, according to a study by the German Institute for Economic Research (DIW) published on Wednesday.

"They would thus represent an obstacle to the energy transition," said DIW researcher Lukas Boer.

Large amounts of copper are required for the construction of wind power and photovoltaic systems, and large amounts of cobalt, lithium and nickel are required for electromobility.

"The demand for these raw materials will rise sharply in the coming decades," is the assumption in the scenario examined.

According to the International Energy Agency (IEA), annual copper consumption is expected to double over the next 20 years, nickel more than triple and cobalt sixfold.

The rate of increase is therefore highest for lithium: in 2040, demand is expected to be more than twenty times as high as today.

Lithium could become 180 percent more expensive

However, the supply reacts only to a limited extent to price incentives in the short term, as Boer's calculations based on historical experience show.

One reason for this: it can take up to two decades for new mines to be developed.

As a result, prices are likely to rise sharply.

According to the scenario, copper could be almost 70 percent more expensive in 2030 compared to 2020, lithium by almost 180 percent.

"If this development actually occurs, the metals examined would have a significant impact on inflation, trade and global economic output in the future," said Boer. "In the scenario, the energy transition could lead to a fourfold increase in the production value of the four metals in the period from 2021 to 2040, making the expansion of renewable energies more expensive." However, unforeseen technological advances could dampen potential price increases and reduce the costs of the energy transition. The same applies if alternative materials prove suitable for generating and storing renewable energy.

"Even if prices do not rise as much as in the analysis of the net-zero emissions scenario: clearly communicated political decisions are crucial for the energy transition," said Boer.

"Uncertain prospects for regenerative energies or electric cars prevent investments in metal mining, for example." A globally coordinated climate policy is necessary that gives producers more planning security.

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