July 21, 2008
Without Supporting Domestic, North American, Production Of Rare Earth Metals Wind Power Advocates Are Just P*****g In The Wind
Analysis of:
Wind Power: Turbine Time | www.economist.com
This analysis is solely the work of the author. It has not been edited or endorsed by GLG.
Implications: Wind turbines can be used to produce electricity but in order to do so they must use permanent magnets and batteries. Building even the 'modest' 17 gigawatts of wind power generated electricity that Texas alone projects would add so much demand for rare earth metals as to be impossible to carry out in the face of present growth in Chinese domestic demand for rare earth metals.
Analysis: China today produces between 95% and 100% of the world's supply of rare earth metals.
It is estimated that by sometime in 2011 Chinese domestic demand for rare earth metals will exceed Chinese domestic production. China has been sharply reducing the export quota for rare earth metals and increasing the export tax on what it does allow to be exported for the last 4 years. This year's quota, for example, will be below just the projected Japanese demand alone.
If the demand for large permanent magnets for wind powered electricity producing turbines were to ramp up even to meet the latest projection just for the State of Texas then the need for the rare earth metal, neodymium, just for this use could not be met based on the current priorities established by the Chinese government.
Therefore unless new sources of rare earth metals are brought into production outside of China, such as the ones under development in Australia, Canada, and the USA, the wind power agenda is in trouble.
Wind powered electricity generated turbines can be built with older permanent magnet technology, but such machines are dramatically less efficient than those built with neodymium based magnets and their return on investment may be too long to be considered.
The future of wind power may well depend on the environmental movement being made to realize just how important it is to get North American rare earth mines into production as soon as possible.
Analysis: China today produces between 95% and 100% of the world's supply of rare earth metals.
It is estimated that by sometime in 2011 Chinese domestic demand for rare earth metals will exceed Chinese domestic production. China has been sharply reducing the export quota for rare earth metals and increasing the export tax on what it does allow to be exported for the last 4 years. This year's quota, for example, will be below just the projected Japanese demand alone.
If the demand for large permanent magnets for wind powered electricity producing turbines were to ramp up even to meet the latest projection just for the State of Texas then the need for the rare earth metal, neodymium, just for this use could not be met based on the current priorities established by the Chinese government.
Therefore unless new sources of rare earth metals are brought into production outside of China, such as the ones under development in Australia, Canada, and the USA, the wind power agenda is in trouble.
Wind powered electricity generated turbines can be built with older permanent magnet technology, but such machines are dramatically less efficient than those built with neodymium based magnets and their return on investment may be too long to be considered.
The future of wind power may well depend on the environmental movement being made to realize just how important it is to get North American rare earth mines into production as soon as possible.
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