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Clean energy faces its own supply chain crisis

That jeopardizes the US’s climate goals

Senator Ossoff Travels Across Georgia, Highlights Key Clean Energy & Infrastructure Projects
Solar panels above parking spaces at the QCells solar panel manufacturing plant in Dalton, Georgia, U.S., on Monday, May 3, 2021. 
Elijah Nouvelage/Bloomberg via Getty Images

The future of energy in America will depend on whether the US can break free from its dependence on other countries that dominate clean energy supply chains. To reach the Biden administration’s energy and environmental goals, the US will have to dramatically scale up its mining and manufacturing, lawmakers argued today during a joint hearing of the House Energy Subcommittee and the Environment and Climate Change Subcommittee. They also raised serious concerns about the US’s ability to do so.

“The sustainable economy of the future will definitely need to be built and manufactured. The question that remains to be seen is whether it will be manufactured by Americans,” said Congressman Paul Tonko (D-NY) in his opening statement.

Joe Biden has pledged to get the US on a path to net zero greenhouse gas emissions by 2050, a key target that climate scientists have identified as necessary to stave off catastrophic effects of climate change. On the way there, Biden envisions a 100 percent “clean” power sector by 2035. He also wants half of all new cars sold in 2030 to be electric or hybrid vehicles.

Those ambitions, however, will depend on the US’s ability to get enough solar panels, wind turbines, lithium-ion batteries, and other critical clean energy technologies and raw materials. But supply chains for these technologies, and for the raw materials like lithium and cobalt that underpin them, are largely concentrated overseas. This was already creating challenges for the US before the pandemic screwed up supply chains, and there are even bigger hurdles to overcome now.

The supply chain for solar panels is an illustrative example. Only 3 percent of solar photovoltaic modules shipped around the world in 2020 were made in the US. Manufacturing and producing raw materials for solar power technology is concentrated in China. Sixty-three percent of polysilicon, a key material in solar panels, is produced in China. Seventy-nine percent of solar cells are built in China. The US produces some polysilicon but, without domestic facilities, sends it to China to be processed.

By 2020, the International Energy Agency had crowned solar energy “the new king” of electricity supply because of falling costs and its projected growth over the next several years. But pandemic-induced inflation and supply chain bottlenecks now threaten that progress, according to an October analysis by Rystad Energy. Rising costs now jeopardize more than half the projected capacity of new utility-scale solar projects planned for 2022.

Other clean energy technologies and raw materials are similarly vulnerable to global shocks and are dominated by China or a handful of other countries. This includes the rare earth elements used in electric vehicle motors and wind turbines and the lithium inside electric car batteries. The Department of Energy released a “national blueprint” to boost domestic production of lithium batteries back in June. Without any interventions, a previous analysis found that US battery production capacity wouldn’t be able to meet even half of the projected demand for lithium-ion batteries for electric vehicles in 2028 as more people leave gas-powered cars behind.

Republicans and Democrats sparred with each other and with experts who gave testimony over the feasibility of Biden’s timeline for a clean energy transition given the supply chain challenges. “We can produce more and more of these products that we use for renewable energy, but we can’t get it done on the timelines that are being put out,” Congressman Kelly Armstrong (R-ND) said. Congresswoman Cathy McMorris Rodgers (R-WA) described the clean energy transition as a “rush to green radical agenda.”

“Only here in the US is this viewed as a rush,” Ethan Zindler, head of Americas at energy research firm Bloomberg New Energy Finance, who gave expert testimony, shot back. “We are well behind on a transition that’s taking place around the globe,” he said.

To achieve its energy aims, Biden signed a bipartisan infrastructure bill into law this week that invests in electric vehicle charging stations and funds a big overhaul of the US electric grid. If Democrats manage to pass an even larger spending bill languishing in Congress, an even bigger investment in clean energy could be on the way.

Republicans slammed Democrats for boosting spending for clean energy while Americans face higher costs for oil and gas during a global supply pinch. Democrats defended the infrastructure legislation, calling it a “counter-inflationary” measure that would create jobs and make the US competitive against China.

Another point of contention was whether the US should dig up more critical minerals on its own land. That would decrease dependence on outside sources, but it poses potential threats to the local environment and nearby communities. The largest lithium resource in the US, for example, sits on land and a potential gravesite held sacred by members of the Fort McDermitt Paiute-Shoshone Tribe in Nevada. Activists are also concerned that a proposed mine at that site, called Thacker Pass, could harm local wildlife and exacerbate a water shortage.

“We’re restricting mining in America to acquire these critical minerals that we need for renewables, but you don’t like getting them from China or the Congo,” Representative David McKinley (R-WV) said. “I have to say you can’t have your cake and eat it, too.”

An expert from Redwood Materials, a lithium battery recycling company founded by former Tesla CTO JB Straubel, advocated for building up the US’s battery recycling capacity as an alternative solution to the US’s supply chain woes. “Quickly ramping a domestic battery material supply chain using the highest possible percent of local recycled raw materials is the best way we can help meet the US’s energy goals,” said Jackson Switzer, director of business development at Redwood Materials.

The hearing went on for over four hours as lawmakers probed everything from China’s history of labor abuses tied to solar panels to how to ensure that clean energy comes with good jobs in the US. While Biden has made well-paid jobs a central talking point of his clean energy agenda, witnesses reminded lawmakers that all the talk still needs to turn into action.

“I’ve spent a lot of time over the last 15 years testifying and speaking on panels about the hope of the clean energy economy for my members and really for domestic industry,” Roxanne Brown, international vice president at large for United Steelworkers, said in her expert testimony. “And it’s been too long to be having this conversation.”

Correction December 1st 9:27AM: This story has been updated to clarify that polysilicon is produced through a chemical process rather than mined. We regret the error. (edited)