Those high-efficiency compact fluorescent lights that are supposed to replace energy-wasting incandescent bulbs have a looming problem: the materials to make them are in short supply.

So are materials vital for things like high-efficiency wind turbines and electric vehicle motors.
Assistant Energy Secretary David Sandalow said those shortages could delay adoption of clean technologies, or make them more costly, so the Department of Energy has developed a strategy to try to avert shortages that is supported by $20 million in Congressional funding.

Sandalow, speaking Thursday at the Center for Strategic and International Studies, outlined a three-pronged strategy DOE has developed over the past year to attack the problem: diversify supply, find more available substitutes, and recycle.

The shortages center around the so-called rare earths, but also include some lighter metals that have properties valuable to advanced technologies.

On the short-term critical supply list are dysprosium and neodymium, needed for magnets and motors in wind turbine-generators and electric vehicles, and terbium, europium and yttrium, which provide phosphors for high-efficiency linear and compact fluorescent light bulbs.

In the medium term, lithium, used in many EV batteries, and tellurium, used in solar thin films, are of concern for the coming years, but not yet critical. The DOE study also looked at gallium and indium, used in advanced solar panels, but found the supply risk low so far.

Complex Supply Headaches

Sandalow said the metals are not rare at all, but mining operations for them are. Currently, 95% of all rare earths come from China. In 2011, the Chinese government ratcheted down its export quotas, keeping the materials for its domestic wind, solar and battery manufacturers, who then export their finished products.

For more on the role of China in clean energy markets on Breaking Energy, read here.

Asked whether China was restricting rare earths exports to advantage its own manufacturers, Sandalow agreed the quotas have “a lot to do with manufacturing.”

But the shortages mean prices for rare earths have spiked to global highs, in some cases 10 to 20 times higher than 2010 prices, and more plans are emerging for extracting the materials outside China.

Sandalow said the DOE study team was able to identify about two dozen locations where mines for various rare earths may open in coming years, starting with Molycorp’s Mountain Pass, CA, mine which is gearing up production now.

Prices Drive Research Across Fuel Types

Finding substitute materials for those in short supply is an area of intensive research in both DOE and private companies, said Sandalow, though no breakthroughs have occurred so far.
For instance, he said, oil refineries use lanthanum, a rare earth, to increase their gasoline yields, but in the face of high prices, they’re developing substitutes.

Also looking: manufacturers of so-called permanent magnets for turbine and vehicle motors that us dysprosium. Those magnets enable larger, more efficient wind turbines, but faced with supply difficulties, non-Chinese turbine manufacturers are working on alternate designs that use smaller magnets or none at all.

Sandalow said work in recycling is just getting under way. Products must be designed from the ground up to be recycled economically on a commercial scale, and made to uniform industry standards that enable recycling. Clean energy technologies are just starting to think about that process.

In this year’s budget, Congress funded a new Critical Materials Energy Innovation Hub. Sandalow said it will focus on technologies for reuse and recycling of rare earths, and of efficiencies in manufacturing that could reduce overall demand for scarce materials.

Sandalow spoke at the USAEE conference in Washington, DC in 2011 to defend federal government’s role in energy research and innovation following the collapse of federally-backed solar firm Solyndra. Watch video of that speech here.