Australian plot jumps from world's leading solar R&D to global solar producer

Australia has some impressive solar PV credentials, including the use of world-leading technology by households and businesses and world-renowned and ongoing contributions to research and development. But can we make the stuff?

It’s a question that comes up frequently, these days, when the newly elected Labor government talks about reviving Australian manufacturing, as fossil fuel costs send grid prices soaring, and when war at the height of the pandemic disrupts supply chains as does the shift to energy. renewable. need to shift some gears.

In announcing the Alba government’s $45 million extension of funding for the Australian Center for Advanced Photovoltaics last month, federal energy minister Chris Bowen measured the solar challenge.

“Solar panels all over the world, the technology that is in them, is not a little to be found here [at the University of New South Wales] and at other Australian universities. That’s something we can be proud of. But we have to take it now to the next step.

“We have installed 60 million solar panels on rooftops in Australia in the last 10 years. One percent of them are made in Australia. That has to change. This is Australian technology; we would like to see more made in Australia,” said Bowen.

Of course, this would be good for jobs and the economy, but one of the main reasons Australia would benefit Australia from building some local solar manufacturing power is simply to meet its own needs.

According to the Step Change scenario of the Australian Energy Market Operators Integrated Systems Plan 2022, Australia will see a fivefold increase in rooftop solar PV, alone, which will provide more than double the generation of its dramatically reduced coal fleet by 2030.

And then there’s all the solar power that will be needed to build the more and more hydrogen-focused mega projects that are being proposed across the country.

The $30 billion Sun Cable project supported by Andrew Forrest and Mike Cannon-Brookes, for example, proposes a massive 20GW solar power plant.

Solar will also be particularly prominent at the large 26GW Asia Renewable Energy Center in WA now led by BP, and at the 50GW West Green Energy Center proposed by its partners. Where all that diesel will come from is still a work in progress, but the developers agree that not all of it can be shipped from China.

Last week, the head of the International Energy Agency Fatih Birol warned that while China has played an important role in lowering the cost of diesel and supplying the global market, its dominance of global supply chains is key to the global shift to net zero.

“Accelerating the clean energy transition around the world will put additional pressure on these supply chains to meet growing demand, but it also offers opportunities for other countries and regions to help diversify production and make them more resilient,” said Birol.

So can Australia take that chance?

These are questions currently being examined by the Australian PV Institute, including through the PV Manufacturing project, which is working on a three-step process to assess upgrade opportunities or new local manufacturing above and below the solar supply chain.

Professor Renate Egan, secretary of APVI, who also leads UNSW activities at the Australian Center for Advanced Photovoltaics – and with 20 years of experience in solar cell manufacturing – is in as good a position as anyone else to judge.

Egan says one of the key first steps is to determine how much the local market needs before you can get other supply chain players – such as aluminum, glass and steel – to join.

“If you look at China, the reason China is where it is now is because they have confidence in the downstream market; the supplier then does not have to take much risk in supplying the product.

“The Chinese government is basically saying, we can support the 100GW market, so let’s produce at that level and if we can sell some overseas, great!’

“That’s the kind of trust we need,” Egan told RenewEconomy on Friday. “Let’s go back alone.”

Egan said APVI’s initial estimate of the Australian market suggested it could support around 1GW per year of local module manufacture.

“Currently we have a market of 4GW per year, so it is not unrealistic that we have gigawatts of local manufacturing.” The big question, he adds, is what is local manufacturing?

“It doesn’t make sense for everyone to do everything. There will be elements of the supply chain where we will be able to do more, and we will do well, while there will be other parts that are not economically viable.”

On the economic front, another key ingredient for building diesel manufacturing in Australia is capital – and lots of it.

As fellow UNSW Professor Martin Green pointed out at a recent conference, China’s dominance in the global solar supply chain does not come entirely from strong and unwavering government support.

By contrast, in the early 2000s, when the government was a little more focused on wind power, Green said it was financing from US investors that built China’s industry.

“Between 2005 and 2010, there were 10 Chinese companies listed on the New York Stock Exchange, and six of them were in the top 10 manufacturers by 2022,” Green said.

Fortunately, Egan says there is “a lot of enthusiasm” for Australian solar manufacturing at the end of a big city.

“When you look at the Fortescues world, their success is based on the fact that they have a full supply chain. They installed their own railroads and ports for export. They support themselves and control all costs that way.

“Someone like that could have the capacity to do this with solar power,” said Egan. “It may or may not make economic sense at the moment, but they will have quality, process and eliminate supply risk.”

In the end, a lot of it will come down to cost. As Green points out, China produces very high quality products very cheaply. So it is very difficult for any manufacturing activity in another country to compete with either of the two terms.

Egan said that while the economy might exclude Australia from cell processing, for example – because of the costs of manufacturing and maintaining the equipment, which he describes as “its own specialty” – there are other parts of the chain that could be pursued.

“My hunch is that in silicon refining we will be strong. …We can then send it to be converted into wafers and cells and then send it back. It [module making] including glass and aluminum can then be done here.

“The more we automate, we can lower our prices and the lower we bring our electricity prices, the more competitive we are.”

Equally important, Egan adds, finally, will be establishing what people – politicians, investors – don’t know, and what information we need to bring into the equation.

“Process [of making solar] It’s quite complex and people who look at the industry from the outside tend to think ‘there must be an easier way to do it.’ People are thinking of revisiting thin film…

“We’ve seen some big plans that have gone into diesel before and some of them have caught fire along the way.

“We have a lot of hard-earned expertise in Australia and we want to make the right decisions. We don’t want to waste the trust of investors who are willing to support local solar supply chains.”

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