Circular Asia News - Issue 17

Circular Systems for Renewable Energy

Energy security is a big deal these days. The war in Ukraine ended our complacency with the renewable energy transition. It seems global warming was just not quite enough. But once businesses, quality of life, and political careers started to shake, energy security has now become front and centre for many governments around the world.

Now, I am not a political commentator nor a renewable energy expert, but as a circular economy practitioner, the use and reuse of materials are of utmost importance in resource management to businesses, quality of life and maybe the political careers of those who can see past the next election cycle.

Transforming the energy system with an emphasis on renewables would substantially cut emissions and keep global warming well below 2C in line with the Paris Agreement. Below is an image that, optimistically, shows that zero emissions are possible. The key actions include: (1) Electrify transport and heating; (2) Adopt renewable-based green hydrogen; (3) Develop a supply chain for sustainable bioenergy; (4) Embrace the circular economy; (5) Maximise all possible efficiency measures; and (6) Promote behavioural and other structural change.

How does the circular economy fit into the renewable energy industry? In 2021, a report from PwC stated, "In 2016, the International Renewable Energy Agency (IRENA) estimated there were about 250,000 metric tonnes of solar panel waste in the world at the end of that year. By the 2050s, yearly waste amounts (5.5m–6m tonnes) could almost equal the mass contained in new installations (6.7m tonnes).

IRENA’s analysis indicates that many technical barriers must be overcome before closed-loop circularity is possible for solar panels. But raw materials can already be treated and recycled at a rate of 65%–70% by mass. By 2030, solar panel raw material recovery could represent a value creation opportunity worth US$450m."

What is a Circular System for Renewable Energy?

That's a good question and one I attempted to answer when, in January 2022, I submitted a proposal to a US contractor and implementer for the US Agency for International Development (USAID) Scaling Up Renewable Energy (SURE) program. Here is part of SURE's circular definition, "A circular economy for RE equipment has significant potential to create green jobs while reducing waste, carbon emissions, environmental degradation, and human rights abuses by keeping products and materials in use. Circular economy strategies that rely on repairing and refurbishing products minimize our use of resources and can cut global GHG emissions by 39% (equivalent to 22.8 billion tons) and reduce our long-term dependence on mining for critical metals used in RE technologies."

USAID’s SURE program supports countries transitioning toward a more circular economy to reuse/repower, refurbish, recycle, or recover renewable energy equipment to reduce the environmental impacts and landfilling of decommissioned components, including specific e-waste.?

Establishing a circular economy for renewable energy is an absolute necessity; however, from my interpretation of SURE's Objectives and Activities Scope, there was a disconnect between how the circular economy is defined and the execution. So, I decided to rewrite the Technical Proposal that may provide USAID with the functionality to implement renewable energy resource management, which is the foundation of the circular economy.

Lack of Circular Alignment Means Missed Opportunities and BAU

Let's take a little detour for the moment. Recently, each of the state Environment Ministers in Australia met and issued a joint 2-page communique which included 'Waste, Recycling and the Circular Economy'. This section focuses on waste prevention and includes better product design and more efficient production processes. Pretty standard approach to the circular economy. Except for one thing, Australian manufacturing has been in decline for many years. From a high of 13.79% of GDP in 1990 to 5.57% in 2021.

While Australia enjoys a positive balance of payments - exports more than it imports, the data provides the details as to how Australia can ever hope to become circular. Australia exports rural and non-rural goods - farm produce and minerals. In return, Australia imports manufactured items, commonly known as consumption goods or ready made products. In 2020, Australian?exports of goods and services as percentage of GDP?was 23.92% and?imports of goods and services as percentage of GDP?was 20.06%.

So, what does it all mean for Australia's circular ambitions? The Australian State Environment Minister's press release certainly has noble aspirations, however it is highly unlikely Australia will be able to influence "... better product design and more efficient production processes" because the bulk of consumption goods are not manufactured in Australia. This could change if there was a shift in collaboration between brand owners and Asian-based manufacturers.

This leaves the 'waste' part. In 2020, a National Waste Report was published, and on the surface the numbers look quite good, until you take a deeper dive. Although waste is going up, 'recycling' is also increasing. Except there is always a discreptancy between what is collected as recycling and what can actually be reprocessed into a secondary raw material.

If there is a very small manufacturing base, what does the 60% recycling rate actually mean? The term ‘resource recovery’ is used to encompass both recycling and energy recovery. Even waste sent to landfill where methane-rich landfill gas is extracted to generate electricity that is sold to the grid is allocated to the fate of 'energy recovery'.

However, the real question is does Australia have a big enough market to actually support a secondary raw materials industry? With bans on the transhipment of waste, how much can actually be reprocessed to be used in Australia? More importantly, can end-of-use-cycle products be reprocessed economically and classified as a secondary raw material to be shipped for use to manufacturers in Asia?

Aligning Circular Systems with Renewable Energy

Similiar to Australia's circular goals, USAID also recognises the value of the circular economy being embedded into the rollout of solar and wind power generation across the developing world. In relation to the SURE Request for Proposal, here is an example of the technical specifications under the Activities Scope:

Phase 1: Identification and dissemination of opportunities for circular economy

• a. Increase awareness of circular economy opportunities, models, and applications for end-of-use renewable energy systems among USAID and stakeholders
• b. Engage and build a network of experts, practitioners, investors, private sector companies, associations, international organizations, governments, and donors active in the nexus of circular economy and renewable energy
• c. Advance the harmonization of waste and circular economy-related definitions?

Although my response to the technical specifications was several pages long, it can be summarised in one graphic.

In Australia's case, a material bank may still not deliver a circular system. There are additional economic considerations, including supply chain engagement, export protocols with receiving countries and secondary raw material collection, handling and processing standards prior to export to be put into place.

Considering the size of the market across every country on this planet, a circular system for renewable energy is far more economically feasible and will transcend national borders. The environmental sensitivities in continuing to extract primary raw materials from the land and next the ocean will see activists, consumers and, increasingly, the legal fraternity move into action. However, establishing circular systems of any type will not evolve on its own.

As for my submission for SURE's Request for Proposal, there were two failures. In order to be successful, USAID would have to reconsider their approach to how a circular system for renewable energy should function. The second failure came from Circular Economy Asia because I had no hope of meeting all the requirements within the very short time frame I was given to put together a submission. Despite this shortcoming, I still wrote a proposal aiming to communicate to USAID how they may like to rethink their approach.

Conclusion

The rapid growth of renewable energy will have two profound consequences. First, fuel-exporting countries’ ability to wield energy resources as a weapon will be weakened. Second, as the geopolitical importance of fuel resources diminishes, the importance of critical raw materials such as rare-earth elements, minerals, and metals will increase.

"...the world’s democracies can no longer ignore their chronic vulnerability to the weaponization of critical resources."

The circular economy is made up of two words - 'circular' or closed-loop systems and 'economy'. The economy part will differ from country to country as the example from Australia clearly shows. Renewable energy could be thought of as an economy all on it own given the scale and number of jobs it will create to decarbonise our world. Equally important, and one I never tire of repeating, is the alignment around a common definition that goes beyond product use-cycle extension and recycling but to resource management.

It is only when we are all aligned around resource management as the foundation of the circular economy will it be possible to establish an energy and resource alliance as suggested by Morten Svendstorp (reference below).

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Ms Adrienna Zsakay is CEO of?Circular Economy Asia Inc ,?and this article represents her opinions on the circular economy.

References

Image: Decarbonisation Solutions - Beyond crisis: Renewable energy for a low-carbon future .

'The Rise of Circularity in Energy, Utilities and Resources' published by PWC in 2021.

World Integrated Trade Solution - World Bank

'The West Needs an Energy and Resource Alliance ' by Morten Svendstorp, published by Project Syndicate, 28 October 2022.