Raw material cost hike threatens to inflate German energy transition’s bill – media
Handelsblatt
A sharp reversal halting the drop in prices for solar panels, wind turbines and batteries caused by supply chain problems and rising raw material costs could become a major hurdle for the new German government’s ambitious energy transition plans, Kathrin Witsch writes for Handelsblatt. Already before the price rally, experts gauged the investments of making the German economy climate-neutral by 2045 to reach six trillion euros, Witsch writes. A doubling of the price for solar panels, over ten percent more for wind turbines and the first-ever rise in battery prices come at a key point, after prices have been falling rapidly for about a decade and the energy transition is gaining steam globally, she argues. The general price rise on global markets would be “felt more strongly in the renewables sector,” as costs for material components and transport would be especially relevant for the technologies that produce power with freely available wind and sunshine, said financial market researcher Ulf Moslener from the Frankfurt School of Finance. These would rise faster than innovation could counter the trend, meaning that raw material prices would become a lead indicator for the cost of renewables after years of falling prices thanks to technological progress, he said. Global energy transition plans would only accelerate the trend toward higher prices on the commodity markets, from mass products like steel and copper to special-purpose materials like lithium or cobalt.
Secure access to resources needed for building the vast amounts of solar panels, wind turbines and energy storages is becoming an increasing concern for companies in Germany and beyond to meet the expected rise in demand for low-carbon products. Supply shortages, price hikes and tighter rules on supply chain management all are casting doubt on whether projects can be implemented and production scaled up at the initially expected costs and have shifted the focus towards better recycling of materials already circulating in the products.
