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Wire & Cable ASIA – November/December 2013
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,’ 5th 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.
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,” 13th September).