Renewable Energy Selects Singapore for $4.3 Billion Solar Plant

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Researched by Industrial Info Resources (Sugar Land, Texas)--The World Energy Council (WEC) (London), which has had a mandate to promote sustainability in energy usage and supply for more than 80 years, sees solar thermal and solar photovoltaic energy supplying 70% of the world's energy needs by the year 2100. Currently, fossil fuel sources provide 80% of the world's energy.

Looking ahead more than 90 years might be a little hopeful in an age of hyperactive technological and scientific development, but the leverage for the development of solar energy sources behind this dramatic prediction cannot be underestimated for an industry that is forecast to have revenues approaching $50 billion per year by 2010.

Solar energy has always been seen as an elegant and aptly scaled source for remote situations and for domestic homes. But its application in commercial and industrial buildings is developing fast, aided by constantly improving cost performance of the technology and economies of scale. Solar Industrial Process Heat (SIPH) is seen by WEC as an ideal application of solar energy. Between 30% and 50% of thermal energy needed in industrial processes is below 250C, which can be easily provided by low and medium temperature solar collectors, the WEC said. As the costs of fossil fuels rise, these solar applications are expected to increase.

In industrialized countries, 35% -40% of total primary energy consumption is used in buildings. If the energy used to manufacture materials and the infrastructure to serve the buildings is taken into account, the building's share of total primary energy can be around 50%. In Europe, 30% of energy use is for space and water heating alone, representing 75% of total energy use in buildings, WEC reports.

One of the world's leading suppliers of solar power product riding this rising energy sector market is Norway's Renewable Energy Corporation, which is involved in an ongoing expansion of its global business. In the U.S., it has established Solar Grade Silicon (SGS) where it is constructing a $600 million polysilicon manufacturing plant at its existing Moses Lake, Washington, plant site. The new plant is due for completion in 2008. SGS is a joint venture between REC and Advanced Silicon Materials (AsiMi) a wholly owned subsidiary of Japan's Komatsu Group. For more details, view related March 23, 2007, article - REC Solar Grade Silicon to Begin Structural Erection of Major New Washington Plant Amid Brisk Pacific Northwest Construction Activity.

In late October, REC signed an agreement with Singapore's Economic Development Board (EDB) to construct a world-scale solar manufacturing complex in Tuas View west of the city state. The site for the project was decided after a comprehensive nine-month process involving the screening of more than 200 locations followed by due diligence on a list of 20 and negotiations with a shorter final list.

The manufacturing complex will be developed in stages and will incorporate wafer, cell and module production facilities with the potential to become the world's largest solar manufacturing complex. The final production capacity of the $4.3 billion project could be 1,500 megawatts (MW) of product per year. In addition to the wafer cell and module production, the complex will include infrastructure and support facilities and an on-site supplier park. There will also be space for future research and development activities and new technology manufacturing.

"The development of this site will enable us to continue expanding in a cost-efficient manner and will support REC's ambitious cost target. Our future cost position will determine our ability to deliver solar products that can compete with traditional energy sources in the sunny areas of the world without government incentives," REC President and CEO Erik Thorsen said.

Pre-engineering activities for the first phase of the project are scheduled to be complete in the first half of 2008 and will be followed by the initial investment decision. The package agreed with EDB includes tax incentives and grants, research and development, and human resources recruitment and training. In March 2007, EDB launched a comprehensive blueprint to grow a world-class energy ecosystem in Singapore across the full value chain of activities in terms of research development, engineering, manufacturing, system integration and headquarters.

At the same time as announcing the Singapore project REC entered into a long-term agreement to supply multi-crystalline silicon wafers to Photovoltech, in Tienen, Belgium. The supply agreement stretches to 2015 and is worth about $975 million. In the take-and-pay contract prices and volumes are pre-determined for the entire contract period.

The new contract replaces and extends REC's existing relationship with Photovoltech. Deliveries of wafers under the new agreement will start in 2009 and increase to about 100 MW of photovoltaic product per year.

Photovoltech's stakeholders are Total, Electrabel, IMEC and Soltech. In 2006 the company had a turnover of $58 million.

REC has a presence across the entire solar value chain and REC Silicon and REC wafer are the world's largest producers of their respective products for solar applications. In 2006 REC had revenues of $804 million and an operating profit of $292 million.

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