Taming New Solar Frontiers
Taming New Solar Frontiers
  • Chun Go-eun
  • 승인 2008.12.16 00:29
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Shin Hyun-woo, Vice Chairman of DC Chemical
With oil and natural gas drying up ever so quickly, and their skyrocketing prices to make things worse, alternative energy sources are seriously required more than ever. Among a few candidates comes solar energy as the most promising player equipped with its unlimited energy supply, the sun, and convenient installation.

At present, the best solutions we have are solar energy and wind power. Wind power production, however, is the highest at night during a 24 hour day, and in wintertime during the year, while solar energy can be produced the most when it is needed the most: during daytime and summertime. This makes it the biggest contributor to dealing with the excessive energy consumption concentration.

The only problem we have with this eco-friendly energy is its higher installation cost that increases its unit price. The good news is, however, that within the next 5 years the scale of production is going to be extended, and the productivity and efficiency is expected to improve as companies become more familiar with the technology, cutting the unit cost dramatically. This is known as the learning curve of technology.

DC Chemical (DCC), a frontiersman in Korea's solar energy development, projects that starting in countries which have high electricity prices and strong sunlight the unit prices of solar energy and of existing fossil fuels will soon reach grid parity, the point where one price equals the other. From that point, the solar market is expected to expand substantially as household demand for installation of solar energy equipment will soar.

According to Solarbuzz LLC, the global demand for solar energy developments grew 42% on average annually, and 34% annual average growth is projected from 2006 to 2010. Vice Chairman Shin Hyun-woo at DCC said: "By 2100, two thirds of the world's electricity demand will be provided by solar energy."

The primary raw material for solar energy developments is polysilicon. Polysilicon is an abbreviated word for polycrystalline silicon, which is a material consisting of multiple small silicon crystals. As the main material used in solar photovoltaics industry, polysilicon is at the top of the supply value chain, followed by ingots, wafers, solar cells, modules and solar power plants. It also requires advanced technology to produce 99.9999999% pure polysilicon. Based on 2008 price and volume estimates, those materials form a $30 billion market altogether.

Currently, Germany, the most government- subsidized country for solar energy developments, has the biggest market followed by Japan. The rest of Europe including Spain and Italy with their innate advantageous environment; North America; China; and India are expected to share the market in the near future.

German companies such as Hemlock and Wacker, Japan's Tokuyama and Norway's REC are known to be the major players in the polysilicon production field.

German and Japanese companies also play a big part in solar cell manufacture. Q-Cell, Sharp, Suntech Power, Kyocera and Sanyo are reckoned to be the high rollers, and recently Chinese companies have started to penetrate the market. In Korea, DC Chemical was the first to succeed in manufacturing polysilicon. Many countries are trying to provide incentive structures to encourage the adoption of renewable energy through government legislation: Feedin- Tariffs (FiT) or government subsidies are part of those policies. "If a household installs solar power equipment, part of the expense can be subsidized by our government," Shin explained.

Europe has been carrying out a strong support policy based on EU renewable energy law. Korea is also starting to bolster its domestic market for solar developments to become one of the world's biggest supporters. Because producing solar energy has yet to be in the black for the present, various measures such as an FiT, supply support, and renewable portfolio standards have been formulated and institutionalized.

Korea's domestic solar power generated 5,474MW of electricity annually in 2006, only 1.1% of Korea's alternative energy, and 0.0014% of its total power supply. The bright side, however, is that Korea has an excellent infrastructure for solar energy developments: cutting-edge semiconductor production technology along with state-of-the-art equipment and skilled workers to help establish the domestic market rapidly. "Localization of polysilicon will facilitate balancing of demand and supply at a desirable price," Shin continued, "and many local companies will be able to take the lion's share in the global solar wafer, solar cell and module business."

He concluded: "Massive investments are being put into Korea's solar energy business in the last 2 years and that proves solar energy has a very bright prospect. Hopefully, there can be bona-fide competition."

Producing clean energy through solar power can curb CO2 emissions which is not only good for the environment, but also good for the economy because according to the Kyoto protocol, it is possible to trade carbon emission credits which have already formed their own market. The solar energy business is also highly related to other industries: semiconductors including solar cells, heavy electric equipment like inverters or electric controllers, and installation and construction industries are likely to enjoy positive effects thanks to the sun.

In the long run, solar energy can be the most desirable alternative with its countless advantages. Even though it is a somewhat risky business since Korea has just established the foundation for the industry and still needs to keep the balance of polysilicon demand and supply, Korea's solar energy industry is expected to become strongly competitive in the foreseeable future and stride towards sustainable developments.

About DC Chemical Co., Inc.

DC Chemical Co., Ltd. (KRX:10060) is a leading Korean chemical producer engaging in a wide range of disciplines, such as inorganic chemicals, petro and coal chemicals, and fine chemicals. DC Chemical's major products include carbon black, pitch, TDI, hydrogen peroxide, sodium percarbonate, soda ash, fumed silica, and polycrystalline silicon, a key raw material for solar cells and semiconductor wafers. As a global enterprise, DC Chemical has nurtured a strong competitive edge in various industrial fields. Recently, the company has entered into the renewable energy business, completed its 5,000Mton Polysilicon Phase 1 plant in December 2007, and entered into commercial production in March 2008. For more information, please visit www.dcchem.co.kr.


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