New Hampshire, USA -- China's solar PV demand sunk 23 percent in 1Q13 to 6.2 gigawatts (GW), driven by seasonality and policy incentive deadlines. Chinese demand largely drove a burnoff in upstream inventory accumulated over several quarters, but repetitive swings in Chinese demand over the next year will emphasize the need for smart capacity utilization and inventory control, according to SolarBuzz analyst Michael Barker in a recent report.
At the same time, more predictable demand levels from other regions — notably Europe, the U.S., and Japan — will emerge over the next year. Germany, Italy, France, and the UK will account for 65 percent of Europe's 2.7-3.2 GW of PV demand this year, Barker predicts. The Japanese market should be strongest in the first half of 2013, while the U.S. will pick up in the second half of the year. The "rest-of-world" group, including emerging markets of the Middle East and Southeast Asia, will provide around 2.5-3.6 GW of demand per quarter.
"Volatile demand swings will continue to hamper the growth of the solar PV industry over the next four quarters, with production and shipment schedules having to be adjusted each quarter," Barker stated. Suppliers focused mainly on China's end market will be most affected by this; suppliers that focus more on Europe, Japan, and the US will see more stable quarterly demand trends, and thus have more ability for long-term planning.
IN THE NEWS
India Targets 750 MW in Next NSM phase, But Questions Remain: India's Ministry of New and Renewable Energy (MNRE) has released draft guidelines for Phase 2/Batch 1 of its National Solar Mission (NSM), which would set up 750 MW of solar PV capacity (and the government will fund almost a third of construction costs). There remain key concerns, though, about how the Viability Gap Funding might influence lower-quality projects for short-term gain rather than long-term performance, and matching states buying power at predetermined prices vs. developers' preferred locations for projects. Meanwhile, Prime Minister Manmohan Singh pledged to double the nation's renewable energy capacity from 25 GW in 2012 to 55 GW in the next four years. He also called for an international R&D center for solar energy (both photovoltaic and thermal) to be operational by 2015.
Suntech Eyes Italy Solar Asset Sale, LDK Defaults: An update on the restructuring storm that continues to blow through China's battered solar sector: Suntech may be looking to sell off its stake in Italian fund GSF (perhaps with a play from Warren Buffett), and LDK defaulted on payment for some convertible bonds to cash. (LDK did sign a 63 MW module supply deal with Thailand developer EA Solar Nakornsawan.) Not all Chinese solar players are struggling mightily with financing. Yingli Green Energy has obtained a one-year $110 million loan and a three-year $55 million loan from the China Development Bank, for working capital and material procurement needs.
ADP Supports Solar in Thailand: The Asian Development Bank (ADB) is providing $85 million in two loans to Solarco, a unit of Electricity Generating Public Co., Ltd. (EGCO), the country's first independent power producer and currently the second largest private power producer, to build three solar power plants in central Thailand with 57 MW of capacity.
Tapping Ocean Thermal Power in China: Lockheed Martin Corp. and China's Reignwood Group will build a plant to generate electricity from ocean thermal energy conversion (OTEC), using technology the U.S. defense company previously worked on in the 1970s. The 10-MW facility, to produce power for a Chinese resort being built by Reignwood, could be the foundation to develop bigger OTEC plants from 10-100 MW in size, enough to power a small city.
Taiwan Outlines Support for Biogas: Taiwan's Ministry of Economic Affairs (MOEA) recently outlined a subsidiary plan for promoting biogas-based power generation at the local government level (municipalities, counties, and provincial cities). Applications are for projects with installed capacity between 65-500 kW; only two applicants are expected get the subsidy every year, the maximum of which is NDT 35,000/kW.
Clenergy Targets 300 MW Project in China: Clenergy, a Sino-Australian solar JV, wants to develop solar PV plants amounting to 300 MW in the southwestern city of Lijiang with CGN Solar Energy, investing RMB 3.9 million (roughly US $625 million) in the projects through 2015.
Funding Energy Storage in Australia: The Southern Cross Renewable Energy Fund is contributing nearly half of a $9.25 million investment in hydrogen storage technology will enable a new renewable energy storage solution. The 13-year venture capital fund was established under the Australian Government's $100 million Renewable Energy Venture Capital (REVC) Fund Program, matched dollar-for-dollar by Softbank China Venture Capital.
Iceland Offering Geothermal Expertise to China: Iceland is the first European country to sign a free trade agreement with China, seeking inroads into the $7.3 trillion Asian economy for its geothermal energy expertise. Concerns that foreign land purchases will slow or impede development and risk natural resources — perhaps triggered by a government rebuff of a Chinese real estate developer's proposed $200 million investment — "are moot," assures Jon Ormur Halldorsson, associate professor in international business at the Reykjavik University.
Japan to Install Battery in Hokkaido to Ease Solar Pressure: Japan's Ministry of Economy, Trade and Industry (METI) will allocate about ¥20 billion (US $204 million) to install a battery energy storage system on the northern island of Hokkaido, capable of 60 MWh of storage capacity. The battery, to be installed by March 2015, is part of a larger plan to respond to a heavy strain of renewable (and mainly solar) energy on the island's power grids.
India Questions US Green Energy Incentives: The U.S. is guilty of the same trade restrictive practices that it now accuses India of practicing, in filings with the World Trade Organization (WTO). The request for information about a list of projects in U.S. states and regions is described as a possible precursor to a formal trade dispute — weeks after the U.S. launched its own complaint about India's own domestic content requirements.
Giant Aussie Wind Farm Ramps Up: The 420-MW Macarthur wind farm in Australia's Victoria state reached full capacity at the end of March. The $1 billion wind farm, a joint undertaking between AGL Energy and Meridian Energy, has been fully operational since late January.
Korean Firm's Pakistani Plans: CK Solar Korea has signed a memorandum-of-understanding to install 300 MW of solar PV power near Quetta in Pakistan's Balochistan province. The project reportedly will cost $900 million and be completed by 2016, on 1500 acres of land already procured by the government.
CdTe Plant in Australia: Australian solar firm AGL Energy has agreed to build a AUS $200 million, 50 MW (AC) Broken Hill plant in New South Wales. First Solar will provide the solar modules as well as EPC services, and manage the operation after it opens in 2015. AGL subsidiary AGL Hydro Partnership is the PPA offtaker.
Solar Roofs on India's Roads: Researchers at the Gujarat Energy Research and Management Institute (GERMI) suggest placing panels over highways solves the problem of land constraints for solar power in India. For example: a PV roof cover over the four-lane Ahmedabad-Rajkot highway, stretching 205 km, could generate 104 MW of power, they calculate; on a grander scale, the four-lane, 5,839-km-long Golden Quadrilateral Highway connecting Delhi, Mumbai, Chennai, and Kolkata could potentially generate 4.4 GW of power. Plans for a 1-MW pilot-scale demonstration project to demonstrate feasibility awaits government approval.
"Buyer's Strike" Against Renewables in Australia: EnergyAustralia and Origin Energy, which together control more than half of Australia's national electricity market, have stopped signing long-term power purchase agreements (PPAs) with renewable energy suppliers, a roadblock to developers seeking financial backing for their projects. A source quoted by the Sydney Morning Herald surmises that the retailers are likely "adopting a wait-and-see approach" until September, in the hope that recently renewed government support for the sector will wane if new leaders are elected.
Solar-Powered Desalination in Nauru: SolarCity New Zealand and Panasonic New Zealand are partnering to provide a 131-kWp solar system to power a desalination plant in the Pacific Island of Nauru, the world's smallest republic. As with many island nations, Nauru is battling challenges on two fronts: fresh drinking water and reliance on imported fuel, primarily diesel.
ON THE HORIZON
India's Solar Trajectory Compared to Coal: Last July, average peak demand in India exceeded supply by 10.5 GW, or roughly 8.1 percent. Estimates suggest India's installed energy capacity would need to reach 960 GW by 2031-32 in order to support 9 percent annual GDP growth — but as of January 2013 it's barely a quarter of that, meaning nearly 37 GW of new generation capacity needs to be commissioned annually to meet that target. Sourabh Sen from Astonfield Renewables examines the role that solar power can — and must — play in supporting the country's power sector growth.
How Australia's Ballooning Gas Exports May Spur Renewables Investments: Australia's $65 billion of projects to export liquefied natural gas from the east coast are set to push up domestic prices closer to what customers in Asia will pay, opening the way for record investment at home in competing energy sources to produce power, reports Bloomberg's James Paton. "It is quite conceivable that we could leapfrog straight from coal to renewables to reduce emissions as carbon prices rise," notes Kobad Bhavnagri, a Sydney-based analyst at Bloomberg New Energy Finance.
Solar Power Plant Activity in Japan: Toshiba and SunEdison are tying up to build out up to 100 MW of solar power plants in Japan, with SunEdison owning the plants and Toshiba as the EPC partner, according to Reuters and Bloomberg, both citing the local Nikkei paper. Also on the drawing board in Japan is SF Solar Power, the Solar Frontier-Development Bank of Japan joint venture established earlier this year, with its inaugural project: a 11.6-MW solar PV project, dubbed KIX Megasolar at the Kansai International Airport, dubbed Asia's biggest airport PV installation. Meanwhile, Isofotón says it will begin two new projects totaling 3.6 MW in 4Q13, in Okunitama (Ibaraki prefecture) and Hiroshima. And TeraSol GK has METI approval for a 475-MW project on the island of Ukushima in Nagasaki Prefecture, with power fed to a grid and delivered to Kyushu Electric Power via a high-voltage, direct current submarine cable
A DEEPER LOOK
Selling Solar Power in India's Slums: Millions of people in India own a cell phone, but don't have a working toilet or power line. Several companies and startups are trying to mirror the mobile boom in India with "leapfrog" technologies, such as solar-powered lights and water dispensers and phone chargers, for the urban poor to help them skip over fossil fuels for electricity.
IN CASE YOU MISSED IT
Lead image: Seesaw balancing market trends, via Shutterstock