"Carbon neutrality" will increase copper consumption by 850,000 tons per year

This year is the first year of China's "14th Five-Year Plan", and also the first year of China's "carbon peak and carbon neutrality" journey. Relevant policy arrangements will be introduced intensively, and greener and lower-carbon economic development will be the main theme of future development. , and achieving the goal of "carbon peaking and carbon neutrality" means that more electricity will replace fossil energy consumption, and the electricity demand of the whole society will be greatly increased. As a non-ferrous metal whose electrical conductivity is second only to silver, copper is an indispensable material for the development of clean energy and terminal electrification. Therefore, in the process of achieving the goal of "carbon peaking and carbon neutrality", it is bound to start from the power generation end. In addition, the demand for copper metal has been increased in terms of both power consumption and electricity consumption.

Achieving the "carbon peak, carbon neutral" policy path

According to IEA data, in the past 30 years, my country's total carbon emissions have continued to rise. By 2018, my country's total carbon emissions reached 9.497 billion tons, of which the power and heating sectors accounted for the highest carbon emissions, reaching 52%. The second is the industrial sector (28%) and the transportation sector (10%), while the total emissions from other sectors account for 10%. It can be seen that the power sector is the main source of carbon emissions in my country. core sector of the transformation. On this basis, it is also necessary to superimpose the electrification of the end-use energy industry and improve the electrification rate of industry and transportation.

Deep decarbonization of electricity is to adjust my country's energy consumption structure. According to data provided by IEA, coal power generation accounted for as high as 61.8% in my country's energy consumption in 2018, natural gas power generation (7.3%), crude oil (3.2%), and hydropower among clean energy sources. (3%), wind power (2.5%), biomass (3.6%), and nuclear power (2.4%), compared with the energy structure of developed economies such as the United States, Europe and Japan, my country’s fossil energy consumption accounts for a high proportion, and fossil fuels The proportion of coal power generation, which has the largest carbon emission coefficient among energy sources, is much higher than that of other major economies. In order to achieve the goal of carbon neutrality, the energy structure dominated by fossil energy needs to be adjusted to a structure dominated by non-fossil energy. From the planning point of view, the proportion of non-fossil energy consumption needs to reach 80% in 2050, and the deep decarbonization of the power sector is a certain direction in the future. For the development of non-fossil energy, biomass and geothermal energy are relatively small, only the Yalong River and Nujiang River are left undeveloped in hydropower, and the space for hydropower is relatively limited. Considering safety factors, the scale of nuclear power construction is much lower than expected. Therefore, in reverse, the future development of non-fossil energy will mainly rely on wind power and photovoltaics.

The proportion of electric energy in terminal energy consumption is one of the important indicators to measure the development level of electrification. According to the above IEA data, it can be seen that the terminal needs to increase decarbonization efforts in the industrial and transportation fields. In recent years, electric energy substitution in the transportation and industrial fields has developed rapidly. In 2019, my country's terminal electricity consumption accounted for 26%, and the industrial and transportation sectors accounted for 25% and 3% respectively. The "2020 Energy Work Guidance" issued by the National Energy Administration It is proposed that electric energy accounts for about 27% of the final energy consumption. In December 2019, the State Grid Corporation of China proposed an important judgment to achieve "two 50%" by 2050, that is, "my country's energy cleanup rate will reach 50% and the terminal electrification rate will reach 50% in 2050", and the terminal electrification rate is expected to reach 2025. Annual increase to 32%, 2035 and 2050 to 40% and 52% respectively. In the industrial field, the proportion of electric energy will gradually increase to 43% in 2035 and continue to rise to 52% in 2050 by changing the use of coal in industrial boilers and industrial coal kilns to electricity. The transportation sector is the sector with the fastest growth in electrification. Under the promotion of the "New Energy Vehicle Industry Development Plan (2021-2035)" policy, my country's new energy vehicles will develop rapidly, and the transportation electrification rate will increase from nearly 3% in 2017 to 2035. 13%, and will reach 35% in 2050.

Carbon peaking and carbon neutrality as drivers of copper consumption

The policy path for carbon neutrality is: first, deep decarbonization of electricity and vigorously develop non-fossil energy, mainly wind power and photovoltaics. Studies have shown that the amount of copper required by renewable energy facilities is several times that of traditional energy facilities; the second is Increasing the electrification rate in the terminal sector, converting coal to electricity in the industrial sector, and developing new energy vehicles in the transportation sector, it can be seen that these two policy paths will increase copper consumption.

The 2020 new energy installed capacity data released by the National Energy Administration shows that in 2020, the country will add 71.67 million kilowatts of wind power installed capacity and 48.2 million kilowatts of photovoltaic power generation installed capacity. The total installed capacity of photovoltaic power generation is 253 million kilowatts. The general secretary has determined that the cumulative installed capacity of wind power photovoltaics will be 1.2 billion kilowatts in 2030. According to the requirement that non-fossil energy consumption should account for 25% in 2030, the industry calculates the total amount of non-fossil energy such as wind, solar, hydro, and nuclear energy. To reach 1.6 billion kilowatts, it is speculated above that the increase will mainly come from wind and solar power generation. It is expected that the total of wind energy and solar energy will reach 1.5 billion yuan. The scale is generally expected to be 70 million kilowatts, and the optimistic estimate is 90 million kilowatts. At the "2020 Beijing Wind Energy Conference", more than 400 wind power companies launched a joint declaration for the first time in the history. After 2025, the average annual new installed capacity of wind power in China should not be less than 60 million kilowatts, and by 2030, it should reach at least 800 million kilowatts.

According to research data released by the National Copper Industry Association, the average amount of copper used in renewable energy systems is 8-12 times higher than that of traditional power generation systems. Among them, wind turbines use about 6 tons of copper per megawatt, and solar photovoltaic power generation uses about 6 tons of copper per megawatt. A megawatt uses about 4 tons of copper. According to the above calculation of wind power and photovoltaic installed capacity, it is estimated that from 2021 to 2025, wind power will consume 1.5 million tons of copper, photovoltaic power will consume 1.12 million tons of copper, and the total annual wind power + photovoltaic copper consumption will be 524,000 tons. From 2026 to 2030, wind power will consume copper 1.8 million tons, photovoltaic copper consumption is 1.12 million tons, and the annual wind power + photovoltaic total copper consumption is 584,000 tons.

According to statistics, the copper demand in the industrial field is about 1.3 million tons, of which 54% is used for transformers and motors, that is, 702,000 tons of copper are consumed, and the remaining 46% is used in non-electromechanical equipment. In the future electrification of the industrial sector, coal-to-electricity conversion will increase copper consumption in transformers and motors. The current electrification rate in the industrial sector is 25% and will reach 43% in 2035. Based on this, it is estimated that the electrification rate in the industrial sector will increase by 18%, and copper consumption in electromechanical equipment will reach 2035. It will reach 1.21 million tons per year, and the annual copper consumption will increase by about 34,000 tons.

The copper consumption of new energy vehicles is about 60kg according to the copper consumption of plug-in vehicles, and the copper consumption of pure electric vehicles is 83kg, and it is assumed that the ratio of plug-in: pure electric vehicles is 2:8. On this basis, we calculate the copper consumption of new energy vehicles. By 2025, it will be 470,000 tons. At the same time, the copper consumption of charging piles will be 3.2:1 in 2020. The long-term goal is to reach 1:1. Considering the increase in the ratio of vehicles to piles in 2020, it is assumed that the ratio of vehicle piles to piles will reach 2025. Reaching 1.5:1, the vehicle-to-pile ratio will increase at a constant rate between 2020 and 2025, assuming that the copper consumption of a single charging pile remains unchanged, and the ratio of household charging piles: public DC charging piles: public AC charging piles will remain unchanged from 2020. It is estimated that the electric pile will consume 87,000 tons of copper by 2025. On the whole, the new energy vehicle + supporting charging pile will consume 557,500 tons of copper in 2025. From 2021 to 2025, the average annual copper consumption of new energy vehicles is 290,000 tons.

Under the guidance of the carbon neutrality goal, China will focus on reducing carbon emissions from two aspects: deep decarbonization of electricity and increasing the rate of terminal electrification. The energy consumption in the industrial sector has been changed from coal to electricity, and the new energy vehicles in the transportation sector have been vigorously developed. It is estimated that during the "14th Five-Year Plan" period, the average annual installed capacity of wind power will be 50 million kWh, driving an average annual consumption of 300,000 tons of copper, and the average annual installed capacity of photovoltaics will be 70 million kWh, driving an average annual consumption of 224,000 tons of copper. Electricity consumes 34,000 tons of new copper every year, and the vigorous development of new energy vehicles increases annual copper consumption of 290,000 tons. Overall, it is estimated that during the "14th Five-Year Plan" period, the carbon neutrality target will increase the annual copper consumption of China's copper sector by 850,000 tons.