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Eamon Keane
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Eamon Keane has an undergraduate degree in Mechanical Engineering and a master's degree in Energy Systems, graduating both with first class honours. He has received the Institute of Mechanical Engineers Best Student Certificate, a Veolia Environment research scholarship and two IBM PhD... More
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  • Will Offshore Wind Growth Boost Rare Earth Demand? 14 comments
    Sep 26, 2009 9:10 PM
    Offshore has some wind in its sails of late. GE has purchased ScanWind to acquire its offshore designs and the European Wind Energy Association (EWEA) has just published a bullish report on offshore. EWEA have placed a European target of 40 GW by 2020 from a current installed base of 1.5 GW worldwide.
     
    This relates to rare earth metals because of the emerging use of Neodymium-Iron-Boron (NdFeB) magnets in the generators of wind turbines. Reliability is particularly important for offshore applications because servicing turbines in the water is problematic and expensive. Traditional Doubly Fed Induction Generators (DFIG) with gearboxes are prone to breakdown. Offshore operating and maintenance costs are variable depending on location but the UK experience with offshore DFIGs has seen O&M take up 23% of total costs. Of these, the gearbox and generator account for 42%. Thus as much as 10% of the capital cost is due to servicing the gearbox and generator.
     
    However Direct Drive Permanent Magnet (DDPM) generators have no moving parts and no gearbox and are therefore much less prone to breakdown. They are quickly becoming the turbine of choice for offshore applications.  DDPMs contain NdFeB, and lots of it. Jack Lifton suggests 1 ton NdFeB/MW however I have not seen a source for that. This source suggests 567kg/MW.
     
    This is of interest to investors in Great Western Mining Corp and other rare earth mining firms as it could be a major driver of growth in coming years. While the EWEA 40GW target may be ambitious, it should be noted that 100GW of offshore wind are at various stages of planning in Europe, with more in China and potential interest in the US also. That said, GE forecasts 30GW worldwide by 2020.
     
    I’ll take the middle of both estimates and assume 785kg/MW and 35GW installed worldwide by 2020 to get an idea of the possible demand from offshore wind. 35GW represents approximately 37% YOY growth in offshore out to 2020 – not entirely unreasonable since the world experienced a similar growth in onshore wind during the 90s.
     
    Those numbers suggest a total requirement of 27,475 tons of NdFeB by 2020 or 8,500 tons neodymium. The following graph distributes this with YOY growth out to 2020:
     
     
    Neodymium global production in 2007 was approximately 11,000 tons. Neodymium use for wind turbines at present is very small but should NdFeB become widespread in offshore wind, this would take up 18% of the 2007 total by 2020 (2000 tons Nd).
     
    There is a lot of research being conducted into making gearboxes more reliable. There is furthermore another generator option – the Direct Drive Synchronous Generator (DDSG) which like the NdFeB magnet variety has no gearbox and is almost as reliable. It has a 30% heavier tower top mass, though. It’s not a given that NdFeB will monopolise offshore generators, but it seems likely to take the lion’s share. GE has acquired ScanWind, which uses NdFeB, and other wind companies are also turning to NdFeB.
     
    I can find nothing that indicates that any wind manufacturers are aware of the supply chain issues associated with neodymium. For rare earth mining investors it is safe to assume, however, that in the coming years increased demand for neodymium will come from the wind sector. The extent of this demand remains to be seen.

    Disclosure: None

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Comments (14)
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  • Jeff Andry
    , contributor
    Comments (67) | Send Message
     
    Great article engstudent. 30-40 GW up from 1.5 is unbelievable. The list of reasons why rare earths could pay off tremendously down the road is continuously getting longer. Thanks for the very insightful write-up.
    28 Sep 2009, 09:34 PM Reply Like
  • Thaidiamond
    , contributor
    Comments (22) | Send Message
     
    Excellent read...and it's not just offshore turbines that will require gobbles of neodymium...onshore versions will too.

     

    Indeed the whole clean tech energy field -- while an obviously boom to rare earth metals -- are generating demand for basic commodities as well.

     

    The National Mining Association puts out document which estimates the metals and minerals used in a Vestas V90 3.0 MW turbine.

     

    They come up with:

     

    • 335 tons of steel
    • 4.7 tons of copper
    • 13 tons of fiberglass
    • 3 tons of aluminum
    • 1,200 tons of reinforced concrete concrete.

     

    I'm extremely bullish on rare earths, but I'm also a bull on base metal plays in copper too.
    30 Sep 2009, 02:29 AM Reply Like
  • Eamon Keane
    , contributor
    Comments (310) | Send Message
     
    Author’s reply » Thanks Jeff and Thaidiamond. I hadn't really thought of wind turbines' impact on other commodities, I'll look into that. I'm aware that NdFeB could be used on land but I chose to focus on offshore because that is where the advantages are clear.

     

    O&M is less expensive on land and thus the conventional gearbox and the heavier and bulkier direct drive synchronous generator can easily displace any neodymium if a supply crunch occurs. Offshore industries would likely outbid other sectors for any limited rare earth supplies because NdFeB is so beneficial.
    30 Sep 2009, 02:51 PM Reply Like
  • Freya
    , contributor
    Comments (3318) | Send Message
     
    Okay, 4 Articles with facts. Loved them. Thank you for Following, otherwise I would not have seen your articles.

     

    I think others will like what they find here.

     

    Thanks to you, though, I now have to revisit Clipper Windpower's website.

     

    CRPWF
    2 Oct 2009, 12:17 AM Reply Like
  • Freya
    , contributor
    Comments (3318) | Send Message
     
    Engs...is that okay with you? Fr is fine with me. Capital F please, personal reasons.

     

    Here is a link which may interest you:

     

    www.clipperwind.com/pr...
    2 Oct 2009, 12:34 AM Reply Like
  • jimp
    , contributor
    Comments (706) | Send Message
     
    Which rare earth miner has the largest and best quality portfolio of rare earths? I believe Avalon has a good supply of "heavy" rare earths, while Lynas has a large supply of mainly light rare earths.

     

    Wasn't sure if one of the rare earth miners controlled the biggest and best supply?
    2 Oct 2009, 06:10 AM Reply Like
  • jimp
    , contributor
    Comments (706) | Send Message
     
    Engstudent,
    Please comment. www.tradingmarkets.com.../
    2 Oct 2009, 06:19 AM Reply Like
  • Freya
    , contributor
    Comments (3318) | Send Message
     
    jimp: check out UURAF, Chinese Owned penny stock. Due Dilligence required.
    2 Oct 2009, 08:59 AM Reply Like
  • yellowhoard
    , contributor
    Comments (1500) | Send Message
     
    Freya,

     

    Apparently, US investors in Lynas will not be able to participate in the secondary offering.

     

    This is due to a 1933 US securities law.

     

    Damn shame. I was going to double down.
    2 Oct 2009, 09:19 AM Reply Like
  • Freya
    , contributor
    Comments (3318) | Send Message
     
    I Quadrupled down on EGI, Had 2K, now have 8K, $2.56. Total Market stupidity. The Mongol deal will be done. EGI is going up.

     

    I was hoping that CQP would drop below $9.00, still waiting.
    2 Oct 2009, 11:06 AM Reply Like
  • Eamon Keane
    , contributor
    Comments (310) | Send Message
     
    Author’s reply » Thanks Fr, I'm aware of your traumatic experience!! Clipper use NdFeB but are probably aware of the supply constraints if the abstract of this presentation is an indication:
    (ewec2009proceedings.in...). I see they manufacture in Iowa, so presumably securing rare earths going forward is a concern of theirs. As they also are focusing on large wind turbines (>4MW), the problems associated with gearboxes would be amplified. This suggests they would have difficulty adapting to a rare earth shortage. Ideally companies should have parallel designs, one with and one without rare earths but that's expensive. Are you investing in Clipper?

     

    Jimp, I haven't looked in detail at the different RE miners, I just followed Jack Lifton's articles which you've also read. As you know, heavy rare earths outside China are critical, so, ceterus paribus, invest there. Thanks for the link, that's interesting. While that sounds promising, it's still at the embryonic stage and would likely encounter difficulties, not least manufacturing, in scaling it up to the huge wind turbine level. The metric when comparing different magnets that's most useful is the maximum energy product. There's a nice comparison table here: (www.rochestermagnet.co...). This tells you the volume, and thus weight, required. Neodymium requires a tenth of the volume of ferrite magnets. Even with a 30% improvement in ferrite, that goes down to an eighth. That technology may well displace some neodymium in applications where weight and volume are not critical. However for wind the tower top mass is important and ferrite would likely be too heavy - although I haven't done the sums. Any more questions, fire away.
    2 Oct 2009, 10:05 PM Reply Like
  • Freya
    , contributor
    Comments (3318) | Send Message
     
    Engs, thanks. I have been watching Clipper for some time now. Really since early 2008, when TBoone started his rant. I have stayed away, for a couple of reasons. One of them was that TBoone used the opportunity to pump his company and then he and his family unloaded 3,000,000 shares which they haven't repurchased. The second was that for all of the Publicity Clipper received in the UK for building the "Queen's Tower", it did not help the share price.

     

    If Good news does not enhance a company's price, I tend to stand aside.

     

    The only reason I mentioned it was because it was a pure play in the sector.

     

    This doesn't mean I'm against it, I'm just waiting to see improvement on the Technical side.
    3 Oct 2009, 05:03 AM Reply Like
  • Victor Babbitt
    , contributor
    Comments (4) | Send Message
     
    Just a note of appreciation. A great, well-researched article EngStudent.. keep it up.

     

    Vic
    30 Oct 2009, 06:10 PM Reply Like
  • William Davison
    , contributor
    Comments (168) | Send Message
     
    Zenergy and Converteam are interesting they are looking to use superconductor-based generators in turbines for off-shore wind farms to enable a 25% more cost-effective production of power.
    www.zenergypower.com/i...

     

    www.converteam.com/maj...
    12 Mar 2010, 11:45 AM Reply Like
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