Fri, May 02, 2025
While the story of renewables may be grabbing the headlines, especially with delegates gathered at the 4th Global Renewable Energy Investors Meet & Expo (RE- INVEST 2024) in Gujarat, behind the scenes is the story of one unassuming metal called copper.
The humble metal that made its appearance on earth before smelted iron, is an essential component for renewable energy technologies like wind and solar power, energy storage, and electric vehicles.
More specifically, renewable energy solutions require up to five times more copper than non-renewable energy ones. And the race to acquire copper resources, as a consequence, has become an important commercial necessity for all nations moving towards a renewable future.
Copper in Renewable Energy Growth
India has set a target to reduce the carbon intensity of the nation’s economy to less than 45 per cent by the end of the decade. As we move towards a low carbon economy, copper demand for the fast expanding renewable energy industry is set to increase exponentially.
For instance, Copper Development Association has pegged copper demand from solar installations at about 5.5 tonnes for every megawatt (MW), while onshore and offshore wind turbines will require 3.52 tonnes and 9.56 tonnes of copper, respectively.
To get a rough estimate of anticipated copper demand, consider this: some 50 solar parks with an aggregate capacity of 37.49 GW have been approved in India, while wind energy has an off-shore target of 30 GW by 2030.
Overall, the country has set a target to achieve 500 Giga Watt (GW) of non-fossil-based power generation capacity by 2030.
To put all these figures in perspective, India already ranks 4th globally in renewable energy installed capacity, 4th in wind power capacity, and 5th in Solar Power capacity (as per REN21 Renewables 2024 Global Status Report).
Role Of Copper In Electric Vehicles
An essential part of our transition to a green energy economy will be driven by electric vehicles. Here too, it is copper that is powering the green vehicles that we are increasingly relying upon for our mobility.
Copper is ubiquitous inside EVs where it is used in various components -- electric motors, batteries, inverters, wiring and in charging stations.
It's the age-old properties of copper -- conductivity, durability, reliability and cost-effectiveness -- that make it indispensable as an essential component in electricity generation, transmission, and storage.
On average, EVs use 2.5 to 3 times more copper than internal combustion engine cars, starting from the motor coil that drives the engine. While a traditional vehicle uses 23 kgs of copper, an EV uses 58-70 kgs of copper.
“Copper is a key component for an electric vehicle and rising EV penetration will spur demand for copper from the auto segment,” Mayur Karmarkar, managing director of International Copper Association (India) told The Secretariat.
Auto segment constituted roughly around 10 per cent of Indian copper demand of 1.1 million metric tonne (MT) in FY23.
Demand For Copper To Soar
However, by 2030, growing demand from renewable energy and auto sector is expected to drive copper demand in India up to 2 MT.
Globally, it is estimated that some 10 million MT of additional copper over the next decade will be consumed.
The copper demand growth in India is based on projections of the country's EV base touching one crore in sales by 2030 and of renewable energy capacity managing to reach the targeted 500 GW by 2030.
Auto segment, in that case, will account for nearly one-fourth of overall copper demand.
From wiring harnesses to electric motors and inverters, copper is present throughout any electric vehicle's architecture.
Another area of copper usage is the EV battery. For every KWh (kilowatt-hour) of EV battery, around 0.4 kg of copper is required. While global copper consumption was at 26.5 MT in 2023, demand for refined copper is estimated to grow by 2.6 per cent CAGR (compound annual growth rate) to reach 35.1 MT over the next decade.
According to ICRA, domestic demand for refined copper is anticipated to grow at a strong rate of 11 per cent in FY25, surpassing the global growth rate in copper demand, owing to the government's focus on infrastructure development and a gradual shift to renewable energy.
In the domestic market, approximately 40 per cent of copper is used by the infrastructure and construction sector, with 11-13 per cent each in the automobile and consumer durables sector.
Copper demand in EVs alone is set to rise from 185,000 MT in 2017 to 1.74 million MT in 2027.
Copper is also used in supporting electrical grid infrastructure. This will be part of the transition towards renewable energy and will spur overall copper demand significantly.
Where To Source More Copper?
India's rising challenge will be to find more copper. Companies like Hindalco, Vedanta, and Hindustan Copper Ltd have primary copper production capacity in the domestic sector.
Although the combined capacity is slightly above 1 million MT per year, actual production is only around 0.6 million MT. India's domestic copper production took a hit due to the closure of Vedanta's Tuticorin plant in 2018.
India has since remained a net importer of copper with imports rising 30 per cent in FY23.
The Adani group’s copper smelter is due for commencing production in FY25 with a 0.5 million MT annual capacity in the first phase and this is expected to go up to 1 million MT annually by 2029.
However, demand for copper will keep rising with renewable energy and EV industries consuming more of the metal. This implies that the demand in the domestic market will continue to surpass domestic production.
Imports and recycling of existing copper scrap are the only ways out for the moment. That will work till India is able to scout out and secure copper mining rights elsewhere.
Russia, Australia, South America and Africa will remain the obvious targets for acquisition drives.
S&P Global in an analysis has predicted that the amount of copper needed by global industry in the next two-and-half decades will be more than that used by the world till date.“The world has never produced anywhere close to this much copper in such a short time frame,” the report noted.
However, with other nations, including India's largest Asian rival China, also joining the hunt for the much-needed metal, the race to plant flags on mines will be a difficult "fast and furious" one.