WCA November 2013

Tonio Buonassisi, an associate professor of mechanical engineering at MIT and co-author of the RSC report, said: “That’s why improved technology is essential.” Professor Buonassisi has in mind an ideal: a photovoltaic module with high efficiency, lower materials costs, streamlined and scalable manufacturing, and unquestionable reliability. “The photovoltaic modules you can buy today have a few of these attributes,” he said. “But not all of them together.” A shift in the Chinese energy sector toward cleaner-burning operations means leaner times for American coal exporters The coal industry of the US provides another example of the extent to which the fortunes of American companies are linked to what goes on in China. Having pinned its hopes on exports to counter a declining market at home, the domestic industry is scaling back those ambitions as demand from abroad starts to ebb. The main cause of the step-down, experts say, is a weakening in Chinese demand. Energy correspondent Clifford Krauss of the New York Times noted that, for most of the last decade, China’s urgent energy needs accounted for more than 50 per cent of world coal demand, driving up international coal prices and stimulating mining activity around the globe. “With Australia and Indonesia straining to produce for China,” the Houston-based Mr Krauss wrote, “South Korea and Japan increasingly looked to the United States for future supplies, stimulating interest in the building of several export terminals in Oregon and Washington State and on the coast of the Gulf of Mexico.” Now, however, after years of mounting imports of coal to fuel its growing economy, China has taken a number of steps to slow those imports. It has modernised domestic mines, made coal-fired electricity plants more efficient, and stepped up development of nuclear and renewable power. To help curb air pollution, China in late summer announced a ban on construction of new coal-fired plants around Beijing, Shanghai and Guangzhou. The plan will shift new power plant construction to natural gas and nuclear and solar power. Mr Krauss reported: “Those initiatives, along with slowing Chinese economic growth, have undercut expectations for rising imports and helped produce an overabundance that has sent world coal prices plummeting by more than 30 per cent from last year.” American coal companies are prominent among those curtailing their mining activities and shelving export projects from Australia to the Gulf of Mexico, especially for thermal coal used to produce electricity. A half-dozen export terminals planned for the Gulf and the Pacific Northwest have already been cancelled. (“US Coal Companies Scale Back Export Goals,” 13 th September).

energy it does draw comes from cleaner sources than it otherwise might have. The building developers also showed him improved energy numbers for last year, set for official release by the city in September. But, he said: “The fact that the Bank of America Tower became slightly less energy intensive is hardly a triumph for the environment.” American researchers credit lower- priced solar panels from China to highly developed supply chains and economies of scale “A study of the photovoltaic industries in the US and China shows that China’s dominance in solar panel manufacturing is not driven solely by cheaper labour and government support, but by larger-scale manufacturing and resulting supply-chain benefits.” ( Energy & Environmental Science ). Reported in the journal of the London, UK-based Royal Society of Chemistry (RSC), the study grew out of work at the US Department of Energy’s National Renewable Energy Laboratory (NREL) and the Massachusetts Institute of Technology (MIT). A bottom-up cost model was developed to examine the underlying causes for the shift in the global manufacturing base of photovoltaics from the US and Europe to China, which as of 2011 produced 63 per cent of the world’s solar panels. As described by the RSC, the NREL/MIT team assumed the perspective of a multi-national firm evaluating locations for a solar panel manufacturing facility in the US and in China. The economic analysis predicted how the firm would decide by examining a factor called Minimum Sustainable Price (MSP) for monocrystalline silicon solar panels to be produced in both regions. The MSP posits the minimum price at which a company can sell its products while still realising an adequate return for itself. Using industry-validated figures from the first half of 2012, the researchers estimated an MSP of $1.19 per Watt for US solar panels, compared to $0.91 per Watt for Chinese solar panels, representing an MSP differential of $0.28 per Watt and a 23 per cent price advantage to the Chinese product. The study cited density of production and the China-based manufacturer’s use of local suppliers, providing it with access to lower-priced materials. (‘Cheaper Chinese Solar Panels Are Not Due to Low-Cost Labour,’ 5 th September). NREL senior analyst Al Goodrich, the lead author of the study, said: “These advantages, which are not indigenous to China, could be replicated by manufacturers based in other countries if comparable scale could be achieved.”  ❖ ❖ In the meantime, American solar panel producers hoping to narrow the gap with their Chinese counterparts face an intransigent fact: MSP costs in the US are higher than the market price of the product.

43

www.read-wca.com

Wire & Cable ASIA – November/December 2013