Aluminium demand could be ‘transformed’ by electrification

Aluminium demand is set to be transformed by the global energy transition, according to new analysis from Wood Mackenzie (WoodMac).

New research forecasts that by 2040, 37 per cent of total aluminium demand will be driven largely by solar, electric vehicles (EV) and transmission and distribution (T&D) industries.

Aluminium stands to benefit significantly from structural shifts in power generation and distribution.

“Transmission and distribution (T&D) aluminium demand remains the second largest contributor after EVs,” the report stated. “A more electrified world and higher electricity output will require grid upgrades that require wire and cable.”

T&D infrastructure is becoming an increasingly urgent priority, particularly in developing nations.

As grid expansion accelerates, aluminium is expected to gain market share over copper due to its cost-effectiveness and improved reliability.

The report highlighted robust aluminium substitution rates across multiple T&D applications, with these substitution trends expected to accelerate as global electricity output rises and investment in renewables and EV charging infrastructure scales up.

The report notes that aluminium’s growing role across emerging energy sectors is underpinned by its lightweight properties, conductivity and lower cost relative to copper.

It concluded that the future success of aluminium as a material of choice depends on a switch to low-carbon production methods.

“Despite growing demand, the long-term sustainability of aluminium relies on the transition to low-carbon production,” WoodMac said.

“While there is an imperative for the development of new, sustainable technologies to replace current high-emitting ones, these technologies vary widely in their level of maturity.

“Solutions such as electric boilers, hydrogen calcination, and inert anodes have significant potential for a medium or high impact on GHG (greenhouse gas) emissions reduction but remain at different readiness levels and are not yet ready for large-scale deployment.”