Solving the energy trilemma with circular economy

Peter Gill, Executive Director of Infrastructure at DCWC, discusses that the path to solving the energy trilemma lies in applying circular economy principles.

Executive Summary

The concept of the energy trilemma is gaining momentum, but it represents a complex balancing act. Achieving one goal might sometimes come at the expense of the others. For example, prioritising sustainability by accelerating our transition to renewable energy sources could have cost implications that affect affordability. Elsewhere, enhancing energy security could involve increasing reliance on fossil fuels, which can harm environmental sustainability.

The circular economy has the potential to contribute to solving the energy trilemma by fostering more sustainable and efficient resource use.

Large, influential companies have an obligation to lead by example.

What is the "energy trilemma"?

The "energy trilemma" is a concept that represents the three interconnected challenges or goals that energy systems and policymakers around the world often face. These three goals are:

Reliability: How to ensure a dependable, secure, and resilient source and supply of energy for businesses, households, and industries. 

Sustainability: How to minimise the negative impacts of energy production and consumption on the environment – and transition to cleaner and more sustainable energy sources to combat climate change. 

Affordability: How to ensure that energy remains reasonably priced and accessible to all segments of society.

The Circular Economy solution

The circular economy will contribute to addressing the complex challenges of the energy trilemma – particularly by creating a regenerative system where waste is minimised, materials are continually reused, and energy resources are optimised.

The circular economy will help address the energy trilemma in three ways:

1. Conserving critical materials through recycling
2. Using low carbon circular materials
3. Designing circular economy systems

1. Conserving critical materials through recycling

For Australia to achieve net zero by 2040, a six-fold increase in mineral input will be required (International Energy Agency). Pressure on key metals such as lithium could prompt growth to more than forty times current levels if the world is to meet its Paris Agreement goals, and nickel and cobalt demand growing more than 20-fold.

With Australia being the world’s greatest lithium supplier, obtaining these materials exclusively via mining presents sustainability challenges to this country, and to the world in general. In addition to lithium mining, a rare earth metal called neodymium used in many electric motors, generators, and also in wind turbines, is mined through a process that is highly polluting. Appearing in relatively small concentrations, this metal is hard to capture, making the mining extraction process more intensive compared to the extraction of other metals.

Such metals also present potential challenges to energy security in Europe with the European Union supplying only 1% of the raw materials needed for key technologies such as wind energy, lithium batteries, silicon photovoltaic assemblies, and fuel cells.

Recycling could help recover metals from the almost sixty million tonnes of smartphones, laptops, hard drives and many other electronic devices. Currently only 1% of neodymium is ever recycled and other metals in electronics that are key to the transition (tantalum, lithium, cobalt and manganese) also face poor rates of recycling.

Lithium-ion batteries are a source of many valuable materials. If recycled properly, potentially 95% of battery components can be recovered for alternative use or may even be turned into new batteries.

Whilst solar panels contain toxic chemicals such as lead (used to assist the PV cells to convert sunlight to energy), up to 95% of a solar panel can be recycled.

A circular economy aims to minimise the extraction of finite resources and ensure longer-term use of these materials if implemented at scale. Some companies are moving ahead on this. Many of the initiatives to recycle these materials are based around IT equipment. The systems being applied to smartphone recycling today may be effective for wind turbines and other equipment tomorrow.

2. Using low-carbon, circular materials

To achieve net-zero by 2040, clean technology such as energy transition equipment or electric cars will need to be manufactured from zero emissions materials, with a requirement not to produce emissions when they are in operation. This too, presents a significant challenge. By 2040, when most vehicles are predicted to be electric, the materials used in manufacturing could account for 60% of their lifetime emissions as compared to 18% in 2020 (World Economic Forum).

A recent UN Environment Program study said, “Global energy-related carbon dioxide emissions rose by 6% in 2021 to 36.3 billion tonnes, their highest ever level, as the world economy rebounded strongly from the COVID-19 crisis and relied heavily on coal to power that growth” (IEA Press Release 8 March 2022 – Global CO2 emissions rebounded to their highest level in history in 2021).

The increase in global CO2 emissions of over two billion tonnes was the largest in history in absolute terms, more than offsetting the previous year’s pandemic-induced decline, the IEA analysis shows. Thus, the circular economy principle must include a source of low carbon materials. For example, recycled aluminium emits up to 95% less carbon dioxide than that from virgin sources. Building energy transition infrastructure from secondary materials will help the transition to net-zero.

3. Designing circular economy systems

Factoring in the circular economy at the design stage will create a truly sustainable energy transition. In the coming decades we will need to install enormous amounts of renewable energy. However, by the early 2030s, the first generation of renewable energy initiatives will come offline, and it is estimated that by 2050 we could be decommissioning seventy-eight million tonnes of solar panels per year across the globe. Similarly, in the same year, the first generation of wind turbine blades could account for forty-three million tonnes of waste.

Now is the time to consider how these products are designed and manufactured for longer asset life, easy disassembly, and recyclability. It has already been demonstrated that with the right planning and attention, the solar panels and wind turbine blades coming offline in 2030 can become the new panels and blades. Siemens Gamesa launched the world’s first wind turbine blade that can be recycled at the end of its lifecycle in 2021 and Australian researchers are leading the way in developing techniques to make the process of recycling solar panels more viable.

Conclusion

The path to solving the energy trilemma lies in these circular economy principles. It is a journey of innovation, sustainability, and responsibility—one that forward-thinking companies and governments must lead. By embracing circularity, we not only mitigate the complexities of the trilemma but also pave the way for a cleaner, more secure, and economically viable energy future. The time for action is now, and the circular economy is our compass.

Peter Gill is DCWC's Executive Director of Infrastructure. Get in touch with Peter →