Monday, March 21, 2011

Saudi Arabia Falls Short on Solar Projections

Oil giant Saudi Arabia hasn't been shy about putting forward a vision to turn its massive potential for solar power into its second major energy export.

But the kingdom's ambitions and pronouncements have so far exceeded results. Though some projects are in the works, the country still doesn't generate any electricity from the sun's light or other renewable sources. Nor does it ship any solar equipment overseas.

So it is not surprising, then, that industry officials are responding cautiously to notions that a recently announced and much-hyped $1.5 billion plant for solar panel parts will help the Saudis make use of solar energy at home.

Last week, Saudi-based Polysilicon Technology Co. — a joint venture between Saudi Mutajadedah Energy Co. and South Korea's KCC Corp. — said it had signed $380 million deal with two Korean engineering firms to build the polysilicon plant along the Gulf Coast.

Polysilicon, short for polycrystalline silicon, turns sunlight into electricity and is used to make the wafers and thin-film cells in photovoltaic (PV) solar panels.

The plant will initially be able to produce 3,350 metric tons of solar-grade polysilicon by 2014. Capacity could tick up to 12,000 tons upon the plant's completion in 2017, a level analysts say would be slightly below most production levels at that time. The three-phase project is expected to cost up to $1.5 billion.

Domestic Industry 'Very Much Yet to Take Off'

Brett Prior, a senior solar analyst at GTM Research in Boston, told SolveClimate News that it is too soon to tell if the Saudi-Korean polysilicon plant would help the kingdom meet its rapidly growing energy demand.

For one, polysilicon must undergo a host of processes before the material can actually be used to generate solar power, he said, and would most likely end up on a global market rather than fuel at-home production.

Shyam Mehta, also a GTM Research analyst, said that in order for the plant to boost the domestic solar industry, Saudi Arabia would also need factories to manufacture the polysilicon into wafers, which are then made into solar cells and modules — which it doesn't have.

Today, most of the world's polysilicon is manufactured in the United States, China and Germany and is usually shipped to China or Taiwan to get assembled into wafers that are eventually turned into modules to generate power.

According to a December report by the Solar Energy Industries Association, the U.S. exported $1.1 billion in polysilicon in 2009, or 40 percent of the global polysilicon market. Germany has a 19 percent share and China a nine percent share. China controls nearly half of the global wafer market, while the U.S. has just a three percent share.

For modules, "China and Mexico were the locations that contributed the most to imports, while Germany, Japan, and China were the most prominent export destinations," the report said.

Saudi's Silicon Output Likely to Be Sold to Asia
"The solar industry today is entirely globalized in terms of trade flows," said Mehta, "so it is more than likely that a good proportion, if not a majority, of the [Saudi] plant's output will be sold to China and Taiwan, which is where the majority of wafer [and solar cell] manufacturing is located."

He continued: "My understanding is that the domestic industry, both in terms of manufacturing and installations, is very much yet to take off in Saudi Arabia."

Nathaniel Bullard, a lead solar analyst for Bloomberg New Energy Finance, said that polysilicon is an "extremely energy and capital-intensive" material that requires several years to develop.

The buildup is more costly for newer plants than for companies already well established in polysilicon production, such as Hemlock Semiconductor Group — which has plants in Michigan and Tennessee — and Wacker, a Munich, Germany-based chemical company, which just opened its first U.S. plant in Tennessee.

Bullard said that while the Saudi plant is intriguing because it is based in an oil-rich kingdom, locating the plant there has more to do with its "cheap and dirty" electricity than its potential market for solar power.

Prior explained: "If you have very low energy prices … then that's a good place to locate a polysilicon plant. [Saudi Arabia] can generate electricity really inexpensively."

Does the Kingdom Have a Choice But to Go Solar?

As a growing number of nations seek to reduce their greenhouse gas emissions from burning fossil fuels — and as the Western world clamors for independence from foreign oil — Saudi Arabia sees its sunny skies as a chance to remain competitive in the global energy market while satisfying soaring domestic energy demand.

Due in large part to its steady population growth, electricity demand is increasing by eight to 10 percent a year, according to just-released confidential U.S. diplomatic cables.

The reports suggest that Saudi renewables could take the place of residual oil that is now used to generate most of the country's electricity, leaving more crude oil for exports.

No one doubts that it has the solar assets for such a move. For an average of 12 hours every day, the sun in Saudi Arabia emits about 7,000 watts of energy per square meter, according to the government.

Prior of GTM Research estimated that if less than 0.1 percent of Saudi Arabia's 830,000 square miles was covered in solar panels, the country could match the 40-million kilowatt capacity in its power plants.

Saudi Arabia's insolation levels, or the incoming solar radiation, are similar to those in the Sahara Desert, central Australia and the southwestern United States — some of the most solar-intensive regions in the world.


Various Solar Ventures Now Underway

While its solar potential has yet to be tapped, various projects to do so are already underway.

In April last year, Saudi oil minister Ali Al-Naimi told the press that the kingdom hopes to become a major exporter for solar energy in the next 30 to 50 years, and he recently called for Saudi Arabia "to become the Saudi Arabia of solar energy."

That fall, officials said the country would produce 10 percent of its energy supply from clean sources — primarily solar — by 2020.

Also in April, U.S. technology giant IBM announced a collaboration with Saudi Arabia's national research institution, the King Absulaziz City for Science and Technology (KACST), to build a water desalination plant powered by solar electricity.

The plant has an expected production capacity of 30,000 cubic meters per day, or enough to serve 100,000 people in the city of Al Kahfji, although IBM did not specify by when the plant would be completed.

In October, California-based SolFocus said it would build the first concentrated PV system in Saudi Arabia, delivering around 300 megawatt-hours of energy, and Japanese firm Solar Frontier said it would supply 10 megawatts of thin film solar modules in a parking lot.

This year, the Oman-based subsidiary of Germany’s Phoenix Solar AG announced it would build a 3.5-megawatt solar park for the Saudi Arabian Oil Company, the largest oil producing company in the world.

On the manufacturing side, one other polysilicon plant is in the works.

In November 2009, Bahrain-based First Energy Bank said it would build a $1 billion polysilicon plant in Saudi Arabia with a local partner. The plant is expected to have a production capacity of 7,500 tons per year when it opens in 2013.

The First Energy plant will be built in the Jubail Industrial City, the same location as the country's new Korean venture.

SOURCE: http://www.reuters.com/article/2011/03/09/idUS100792642520110309?pageNumber=1  

2 comments:

Every Day Green Living for You and Me said...

Great post, I learned a lot. Thank you

Adel Elnagar said...

Just a slight correction that there is a 2 MW pv plant at Kaust north of Jeddah, Saudi Arabia already connected to the grid and in operation since january 2010