Intersolar North America 2008: Silicon Updates

[San Francisco, California USA]

Dow Corning and REC Silicon Videos and select Presentation slides.

As part of the North American Photovoltaics Advanced Manufacturing Technology Conference: Bulk Silicon at Intersolar, here is a video of the presentation:

Silicon and Silicone: Addressing Critical Needs Throughout the PV Value Chain
Dr. Gaetan Borgers, Global Industry Director, Dow Corning Solar Industry

Focusing on Dow Corning’s Upgraded Metallurgical (UMG) Silicon developments, Dr. Borgers said:

By end of last year, we have gone from 1000 to 3000 metric tons of capacity. And the important thing I want to highlight here is that we did that in less than a year. And I think that’s proving one of the benefits of metallurgical silicon which is that you can bring additional capacity quickly.

Dow Corning is considering large UMG capacity expansions after the next generation material is launched.

After some production delays, the PV-1201 market launch is now expected in the fourth quarter of 2008. Dow Corning claims PV-1201 will permit blend ratios of 25% (percent) or better with polysilicon. As shown in the roadmap, an even purer material with greater than 80% blend ratios is expected in 2009 or 2010.

Later at the Solar Materials, Equipment & Technology (SMET) Conference, I also videoed the Renewable Energy Corporation ASA (OSL:REC) REC Silicon division presentation:

Overview of Silicon Production and Capacity
Gøran Bye, Executive VP, REC Silicon

REC does not believe the strong growth of polysilicon availability will result in immediate oversupply because:

• Almost all REC polysilicon capacity is contracted under Prepaid or Take or Pay (TOP) terms, and it will be paid.
• Polysilicon inventories are nonexistent
• Huge underutilized downstream capacity exists

Continuing, Gøran Bye said:

In addition to that, if we do believe in the solar story, and we do believe that cut wafers will be an important part of that in the future, there is a significant additional capacity that is needed by (?) 2020.

If the cut wafer part of the industry continues to grow with about 33-35% per year, there will be a need for 800000 (metric) tons of polysilicon in 2020.

Thin Film Photovoltaics has emerged as a key driver for monosilane gas demand growth as overall demand has almost doubled from 1600 MT (metric tons) in 2006 to 3000 MT 2008. While production capacity is far larger than merchant market silane gas demand, most silane is used by REC and MEMC Electronic Materials, Inc. for internal polysilicon production. There may be a supply pinch in 2008, but this will be an inventory and logistics issue only.

REC plans to support the growth of the merchant silane market and maintain their market leading production and sales position through long term contracts with their gas distribution customers.

Start of something big
REC Silicon’s ambition is to maintain their market position as the photovoltaic industry continues to experience tremendous growth per the above slide (a bit different from the one shown in REC Group Capital Markets Day 2008). Their next production facility is expected to be up to four times as large as the new Moses Lake facility to achieve the scale required for competitive low cost polysilicon production. REC Silicon is also evaluating silane production capacity expansion dedicated to supplying the merchant market.

And the next day, Friday, July 18, 2008, REC announced “Secures NOK 5 billion in silane sales contracts” and said:

REC Silicon, the world's largest producer and seller of monosilane gas, has signed a number of new long-term agreements with existing customers (major gas distributors) for the supply of monosilane gas (SiH4).

REC claims monosilane gas deliveries are already underway at average sales prices about 15% higher than prior market pricing. These contracts represent all the monosilane capacity REC plans to allocate to the merchant market through 2009 with additional volumes in 2010 through 2014 dependent on end user demand growth.

I presume longtime REC customer and partner, Air Products & Chemicals, Inc. (NYSE:APD), is among the existing customers securing long term silane gas supplies for their photovoltaic, semiconductor, and flat panel display end customer base?

REC Group Capital Markets Day 2008

2008 Margin outlook triggers the solar stock to sell off through Blue Monday.
Search underway for a potential expansion site to locate about 25000 MT of polysilicon production capacity.

Beginning with their Capital Markets Day 2008 event on Friday, January 18, 2007, Renewable Energy Corporation ASA (OSL:REC) shares declined 38.6% in two trading days before rallying 13.2% on Tuesday, January 22, 2007.

Per this Reuters report, REC sees margin dipping in 2008, rising from 2009, by Aasa Christine Stoltz, the margin drop in 2008 is caused by a doubling of expansion costs. REC Group CEO Erik Thorsen said:

There is a concentration of ramp-ups (of projects) in 2008, which we will benefit from in 2010 and onwards. That's why we are indicating that our expansion costs will go from 2.5 percent in 2007 and ending at about 5 percent.

While there are eight Capital Markets Day presentations about technology, business divisions, projects, and finance available on the REC website, I found the REC Silicon Presentation by Executive Vice President Gøran Bye the most interesting and relevant.

Here are a few key points from REC Silicon presentation.

REC Silicon projects 125000 to 160000 MT (Metric Tons) of total realistic polysilicon production capacity through 2012 or enough for about 11 to 16 GW (GigaWatts) of crystalline silicon solar modules. In REC Silicon’s view, one-quarter (25%) or less of all announced, planned, and rumored polysilicon capacity expansions by new entrants (Tier 2 and Tier 3) will succeed by 2012.

From 2006 to 2008, REC Silicon forecasts the silane (SiH4) gas merchant market will have greater than 30% CAGR (compound annual growth rate) to about 3000 MT in 2008. Silane gas demand is driven by semiconductors, flat panel displays, and photovoltaics. As reported in Key a-Si thin-film solar cell chemical subject to price pressure by Nuying Huang and Esther Lam at DIGITIMES (subscription may be required), supply fears are increasing silane prices for amorphous silicon thin film module production. REC Silicon plans to leverage the silane demand trend by continuing to service the merchant market and is implementing a take-or-pay, long-term contracts strategy.

Beyond approved investments of about NOK (Norwegian Krone) 6.5 billion or USD $1.19 Billion, REC Silicon announced the search for a potential expansion site to locate about 25000 MT of polysilicon production capacity consisting of four 6500 MT Moses Lake Reference Plant scale facilities with an early 2012 ramp target. In the research note, Renewable Energy: Sell-off represents buying opportunity, Piper Jaffray & Co. Sr. Research Analyst Torben Sommer said:

This new facility will either be located in Iceland, Canada or USA – close to cheap electricity. We expect an announcement later in 2008.

In addition, REC said they are evaluating sites for silane gas production dedicated to (the) merchant market.

I have two closing notes for regular Blog readers.

• GUNTHER Portfolio has joined the featured blogs at Greentech Media.
• I have been getting a lot of emails so it may take a while to get a reply. I try, but I don’t always manage to reply to everyone.

One thing to remember about silane: It’s a gas.

Solar Light Flashes: December 31, 2007

Select Photovoltaic News Tidbits

In this final Solar Light Flashes of 2007, I need to catch up on accumulated tidbits I’ve collected over the past few months.

Advent Solar, Inc.
If recent events at Miasolé regarding former CEO David Pearce are the precedent (see Former Miasolé Employees Confirm Cuts by Jennifer Kho at Greentech Media), then Advent Solar Appoints Peter Green as new President and CEO, tends to indicate Rusty Schmit’s days with Advent may be numbered despite the claim:

Company founder Rusty Schmit will remain a member of the Board of Directors in an active role focused on strategic initiatives and will be working with Peter to ensure a smooth transition.

This development also lends credence to anonymous rumors the retooling and layoffs are masking process issues.

Blue Square Energy
While I was on my best behavior at the Dow Jones VentureWire Alternative Energy Innovations 2007 conference in Redwood City, California, AlternativeEnergy.com captured this video of Blue Square Energy (BSE) President and CEO Jeff Barnett’s presentation.

Concentrix Solar GmbH
In the under reported Concentrix passes all tests required for starting construction of its 500 kW power plant in Spain (October 2007), the company’s 5.75 kW prototype system passed ISFOC, Instituto de Sistemas Fotovoltaicos de Concentración S.A. or Institute of Concentration Photovoltaics Systems, required qualification tests including draft IEC standard 62108 D8d (now IEC 62108 Ed. 1.0). Construction of the 200 kW Puertollano, Castilla La Mancha – Spain, installation was supposed to begin in early November 2007.

Greentech Media
Greentech Media: Conversations has so far rolled out two of a six part discussion series with Dr. Richard Swanson, co-founder, President, and Chief Technical Officer (CTO) of SunPower Corporation. Since the series is sponsored by SunPower and mirrored over at the SunPower website as the Richard Swanson Podcast Series, this series has the appearance of an infomercial. Then again, what photovoltaic company would want to sponsor a series about a competitor? Nonetheless, I am sure these podcasts with Dr. Swanson are worth a listen.

Izusu Glass Co., Ltd.
DigInfo (Digitized Information, Inc.) has a short video about Izusu Glass compound parabolic concentrators (CPC) produced using a glass mold process to reduce manufacturing costs.

Oerlikon Solar
I just noticed this public relations Oerlikon Solar Image Film on the website available via streaming (English, Deutsch) or download. And here is an apparent bootleg video Report on solar energy from CASH-TV in German (Deutsch) aired back on October 7, 2007. Oerlikon Solar is a business segment of OC Oerlikon Corporation AG (VTX:OERL).

REC Solar Grade Silicon LLC
This REC Silicon Groundbreaking video by Grant County EDC showed up on YouTube before Christmas even though the ceremony to mark the construction of the new Solar Grade Silicon manufacturing facility in Moses Lake, Washington USA, was held way back on August 16, 2006.

A few updated photos of the construction are posted on the Grant County Economic Development Council website at REC Silicon Project. Slated to ramp in the second half of 2008, the new plant is based on a proprietary FBR (Fluidized Bed Reactor) process and will add 6500 MT (Metric Tons) of granular Solar Grade Silicon production capacity. REC Solar Grade Silicon LLC is a wholly owned subsidiary of Renewable Energy Corporation ASA (OSL:REC).

Solarvalue AG
The stockings of Solarvalue AG (XETRA:SV7) shareholders were empty this Christmas. No (char)coal, wood chips, quartz, or Solar Grade Silicon (SGS) sample material from a US lab. But did the Solarvalue ÜberBull get high sulfur coal from Santa Claus?

Two series begun in 2007 remain unfinished. I have noticed significant interest in Timminco Limited: O Canada! Solar Grade Silicon, Eh? – Part 1. This is a top priority at the start of 2008, and I have two additional parts planned. There was also supposed to be a Part 3 after Sunways goes its own Silicon ways – Part 2 to cover the Automotive solar segment of Sunways. I have the material but just have not gotten to the write up.

Once again I wish everyone a Happy New Year 2008 and may it be happy and prosperous for us all.