Dealing with Rare Earth Risk

Offshore Wind’s Risk Exposure

Thanks to its low cost, low carbon and high reliability, offshore wind is looking at a future where it is one of the world’s main energy sources. The Global Wind Energy Council is forecasting growth of 300GW of offshore wind by 2030, 8x total installed capacity in 2020.

However, this rapid scale up could be at risk if sufficient and affordable rare earth supplies are not available in time. The offshore wind industry faces clear and quantifiable risks, which is disproportionate due to a rapidly increasing demand for a critical and supply constrained material. There are clear critical risks around rare earth supply, price spikes and perhaps most critically the sector’s deserved reputation as a sustainability champion.

While other sectors like defence and automotive are taking remedial action, the offshore wind industry has not yet presented a credible action plan.

Meeting the 1,400GW target by 2050

Between 2020 and 2050, global offshore wind is forecast to increase by a factor of 48 times. On average we will need to install 46GW a year between 2020 and 2050 to hit the 1,400GW target.

That means our average installation rate over the next 30 years needs to be over 30x higher than over the last 20 years. Although offshore wind has proven that it can deliver low cost, low carbon power, it is a nascent industry and scaling at a rapid rate will through down many challenges. Perhaps the most difficult of all to address will be securing affordable long-term rare earth magnet supplies to support an aggressive growth target of 1,400GW by 2050.

Our objective is to work with a network of international partners to co-develop our generator to deliver a commercially viable and environmentally friendly solution for the offshore wind sector.

The Rare Earth Market’s Hidden Environmental Legacy

China’s Ministry of Industry and Information Technology estimates the bill to clean up for mine restoration and clean up RMB38 billion (£5.6bn) in the southern mine area of Ganzhou city alone. Ganzhou provides only 8.6% of national production.

Rare earth magnets for wind are a direct contributor to these impacts. A single 14MW turbine will be responsible for 546,000 m3 gas containing hydrochloric acid, 9.1 tonnes of radioactive waste and 1,820 m3 acid containing sewage water.

China has begun to tackle rare earth element pollution, tackling illegal mining and consolidating rare earth element production into 6 state-owned rare earth companies. It remains unclear if China will deliver rare earth mining and processing to a standard compatible with ESG reporting requirements.

Analysts project that over time increased sustainability will increase prices, as externalities are priced in.

PLASTIC PIPES PUMP RESIDUES FROM THE NEARBY RARE EARTH PROCESSING PLANT INTO THE BAOTOU TAILING DAM. SAMPLES FROM THE DAM HIGHLIGHT A TOXIC SLUDGE CONTAINING ELEMENTS SUCH AS CADMIUM, LEAD AND THORIUM. IMAGE: LIAM YOUNG/UNKNOWN FIELDS

Offshore Wind’s Demand for Rare Earth Magnets is Only Going to Increase

The power of a generator increases in proportion to the swept area of the rotor (i.e., radius squared). However, because blade tip speed is limited (to help manage leading edge erosion, noise, etc.), larger rotors mean lower rotor rpm. Generator size is related to the torque: proportional to power and indirectly proportional to rpm.

This means that the generator size inside a turbine increases at a faster rate than the overall power rating. For example, a doubling of the power leads to an approx. 2.8 increase in the mass of the generator and magnetic material required.