Analysts forecast that the importance of silver in the energy industry will increase in the coming years.
By 2050, they estimate that more than 50% of the demand for this metal will go to power generation.
Silver is a precious metal with physical properties that make it suitable as a raw material for many industries, which is why it has significant demand in this sector.
One of the industries that will shoot up its silver consumption in the coming years is energy. According to a recent report, prepared by the British consultancy CRU for The Silver Institute, more than 95% of the increase in silver consumption until 2050 by the energy sector will be due to the rise in photovoltaic solar energy installations.
According to CRU, the volume of installed plates will continue to increase over the next decade. This is due to the restrictive legislation on carbon emissions and other policies. Besides, the cost per GW of energy generated using photovoltaic panels has reduced.
Until 2030, the consumption of silver by this sector will remain between 20 and 30 million ounces.
In 2019, electricity generation reached 26,663 Terawatts per hour, representing an annual growth of 2.9% since 2009.
They estimate that the growth of global electricity generation will slow down to an average of 2.2% between 2019 and 2025, with a total production of 30,317 TWh in 2025.
This slowdown will take place mainly in the most developed regions, such as Europe, North America, and Northeast Asia. These areas have most widely implemented the most efficient energy technologies.
In contrast, in regions such as China, India, Southeast Asia, and sub-Saharan Africa, there will be rapid growth. This will most likely due to improvements in quality of life and economic growth.
The report also confirms that renewable energy still has a long way to go, since fossil fuels (coal, oil, and gas) are still being widely consumed.
Silver prices have increased considerably
The growth in the number of photovoltaic solar installations represents an increase in the demand for silver in this sector. However, this growth is less than the rate of increase in facilities, as the industry tries to reduce the amount of silver used in the panels to cut costs.
In 2009, 521 mg of silver was used per cell. The consumption of the metal dropped by 130 mg since 2016 (-12.9% annually). By 2025, the figure is likely to stabilize at around 80 mg per cell.
According to the report, the main reason for this reduction is the increase in the price of silver. Between 2009 and 2011, the cost of the metal has doubled, while the price per cell dropped by almost half.