Redesigning energy transition pathways: Integrating mineral constraints and circular economy in net-zero power system planning

The energy transition to net-zero emissions (NZE) requires extensive deployment of renewable energy resources and battery storage, a trajectory increasingly challenged by the limited supply of essential critical minerals, such as lithium. This study addresses a critical gap by integrating the dynamics of mineral resource availability into power system capacity expansion planning (CEP). A novel methodology is developed to impose time-dependent path constraints on lithium supply, capturing limitations from both primary production and the material recovery of end-of-life batteries via recycling for new manufacturing. This approach explicitly models the circular economy’s contribution to lithium availability for future storage deployment. Applied to the New South Wales (NSW) power system, the analysis reveals that lithium supply shortages, compounded by competing demands such as electric vehicles, severely limit battery energy storage deployment. Conversely, pathways with augmented primary supply or robust recycling yield significant reductions in total system cost and carbon emissions. These results underscore the necessity of a resource-aware CEP framework to inform policy and investment decisions for designing a resilient, cost-effective NZE transition pathway that explicitly accounts for critical mineral limitations.