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Developing Resilience Through Diversity in the Welsh Photovoltaic Industry


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Far eastern manufacturers have significantly undercut European manufacturers in the production of crystalline silicon solar cells. Some have described this as a ‘Solar Trade War’. This presents a challenging context for the European Industry as crystalline silicon technologies comprise the bulk of the marketplace. In Wales, this situation has been given particular poignancy by the closure of Sharp’s module assembly in Llay, Wrexham – where imported silicon solar cells were assembled into larger modules.

For the UK, the regional context for this industry is emerging. Competition based on labour-cost is impossible so there is a need to discover distinct regional strengths in order to stay competitive. There is an importance to focusing on products which offer a high degree of Gross Value Added. This means focusing on strategic niches and technologies that whilst not perhaps offering the highest conversion efficiency, offer attractive returns through economic competitiveness.

There are a range of other PV technology trajectories – thin-film cells and excitonic cells which occupy a much smaller proportion of the marketplace, however, whilst presently less efficient, they promise the potential of continuous production processes that may enable them to be produced more cost effectively. Furthermore, the technical properties of thin film cells lend themselves to capturing diffuse light, whereas silicon solar cells perform better with direct light. This may be considered a good fit between the technology and the weather of the regional market the technology could potentially serve!

This paper provides an analysis of Wales regional strengths in PV, the interesting diversity of research into PV technologies within Wales with a view to how the nation can retain competitiveness in this arena. The work will build on extensive analysis and involvement already undertaken CSER for the DECC UK Solar Roadmap.

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Developing Resilience Through Diversity in the Welsh Photovoltaic Industry

  1. 1. Developing resilience through diversity in the Welsh Photovoltaic Industry Gavin D. J. Harper @gavindjharper Regional Science Association International – British & Irish Section 43rd Annual Conference & Doctoral Colloquium, Aberystwyth, Wales 19th – 21st August 2014
  2. 2. Catalyst for Research The main objective of WEST is to develop skills to aid the utilisation and uptake of new technologies developed through the LCRI industrial research projects. This will ensure that industrial research is disseminated through both traditional educational streams as well as directly to industry through Continuing Professional Development (CPD).
  3. 3. Industrial Advisory Group • In order to produce Skills & Training Needs Analysis for Welsh PV Industry, an Industrial Advisory Group was formed. • Desk based research • One-to-one consultation interviews • Questionnaire • Networking at events with key stakeholders in the Welsh PV supply chain Further details in Harper, Rowlands-Jones & Irvine (2014)
  4. 4. Context for the UK PV Industry • “Solar PV is a credible asset class that offers greater long-term returns than cash or bonds, but with a lower risk than equities or property.” • “The upcoming election in May 2015 is helping to create a static policy environment until then, minimizing risk to investors.” • “The slowdown in other European markets (in particular Germany) has created extra sales activity in the UK” Quotes from Colville (2014b)
  5. 5. UK PV Installations
  6. 6. Potential Jobs Growth in PV Projected Manufacturing Jobs Depend on Global Demand for PV Projected Installation Jobs Depend on UK Demand for PV Graphs taken from Irvine, Jones & Rowlands Jones (2013) Key recommendations from ESP KTN Solar Photovoltaic Road Map 2013
  7. 7. Great Britain is now the most exciting growth market for solar in Europe. And there are three prime reasons why the UK should be the destination of choice for any solar company looking to invest in Europe. First, our UK domestic market has the greatest growth potential in the EU. Second, the UK has a reformed, robust and fully-financed support framework for renewables, set all the way to 2020 and beyond. And third, we are an emerging global hub for advanced manufacturing. Greg Barker MP, quoted in:
  8. 8. UK solar PV market reaching a record-breaking 1.45 GW of new additions in 2013 Nearly 70% of the UK market was supplied by Chinese module suppliers Source: Colville (2014) BUT
  9. 9. Sharp Closure • Around 615 jobs (including agency staff) lost with closure of Sharp’s Llay, Wrexham solar factory. Photo by Peter Byrne/WPA Pool/Getty Images
  10. 10. Sharp Closure • Wrexham MP, Ian Lucas (2013) has criticised the Coalition’s changing attitude to renewables, criticising: • Changes to the Feed In Tariff system • Changes to the investment framework for renewables • Talking down the positive potential for renewables to create jobs. • However, challenges for Sharp potentially have deeper roots. • Regional uncompetitiveness in silicon PV manufacture not unique to Sharp, other silicon PV manufacturer closures in West.
  11. 11. Sharp Closure • Looking at the markets the Wrexham plant served, it becomes clear to see why the plant closure began to look inevitable. • Declining EU market share (due to cheap imports) • Dramatic increase in Sharp’s home (Japanese) market. (Where quality products command a premium price)
  12. 12. Sharp Manufacturing, Llay, Wrexham Sharp Closure Crystalline Silicon Cells Brought From Taiwan To Llay Finished modules shipped back to Japan.
  13. 13. The seed of the idea for this paper… Diverse regional sustainability strategies: template for the future or squandered resources? Harper & Wells (2012)
  14. 14. Resilience: • The ability and capacity of an individual, community, or economy to withstand, alter, evolve and respond to shocks and [un]anticipated changes (Hudson, 2008) • Resilience as a concept is debated and discussed by (Adger, 2000; Duit et al., 2010) •Diversity often recognised as a key component of successfully resilient systems.
  15. 15. Wales: Competing with China?
  16. 16. Wales: Competing with China?
  17. 17. PV in Wales Regional Strengths Manufacture & Commercialisation Centre for Solar Energy Research (CSER) @ OpTIC Glyndwr Expertise in thin-film, Cadmium Telluride cells. Expertise in novel MOCVD process & advanced optics. GB Sol, PV Module manufacture. Mounting Systems Manufacture. G24i Manufacturer of dye sensitised solar cells. Bangor University Dye sensitised cell research Sharp Silicon Module Manufacture. SPECIFIC, Swansea University Ser Solar, Swansea University PV Research Pure Wafer (Reclaimed Silicon Wafers) Dyesol BIPVCo IQE Multijuction PV (Concentrators)
  18. 18. Comparing Photovoltaic Technologies • Thin film technologies compete on the basis of slightly less efficiency, but at a lower cost / kW • Slightly less efficient per unit area. But better at capturing diffuse light – so potentially well suited to Welsh climate. • Seen as a “substitute product” rarely the default choice. • Crystalline silicon raw materials cost around 20%. For thin film, figure is 10% • Crystalline silicon manufacturing technology is “commodified” whereas thin film manufacturing technology is proprietary. • Efficiency of cell technologies directly impacts the cost of installed technologies, improvements in thin-film performance improve competitive position.
  19. 19. Thin Film / Excitonic Cells: Continuous Production? Crystalline Silicon Cells “Batch” Production Thin Film / Excitonic / DSC Cells “Reel to Reel” Production Image: Sharp, Llay Wrexham, Silicon Cell Production Image: G24i Power, DSC Cell Production
  20. 20. Inline MOCVD Process • Funded by LCRI “SPARC” project. • Chamberless MOCVD process. • Creates potential for “continuous” production of thin film devices, rather than “batch“ production. • World First
  21. 21. Capturing other value from PV • PV Modules are only part of the system. Opportunities to capture value through balance of system components. • Other electrotechnical equipment • Cables (Prysmian) • Switchgear (Eaton) • Inverters • Mounting Systems (GB Sol)
  22. 22. Conclusions • The closure of Sharp’s module assembly in Wrexham was a blow to the confidence of the Welsh Photovoltaic Industry. • Some concern also, about other firms relying on crystalline silicon, based on price competition from the Far East. • Specialist multi-junction silicon cells, e.g. IQE, Cardiff epi-foundry, perhaps less sensitive to imports due to niche application. • However, the Welsh PV sector appears to show vibrant potential for growth based on a diversity of different technology pathways, which could offer “resilience” in the face of competition.
  23. 23. Conclusions • Looking at the case of the Welsh PV industry, there appears to be some validation that diversity in the technologies being developed within the regional innovation system has led to resilience in the face of intense price competition. • Many promising avenues for potential development – technologies in the process of commercialisation / being brought to market. • Potential to capture value from balance of system components. • BUT outstanding challenges to be resolved with market acceptance of thin film.
  24. 24. Conclusions • Looking at the case of the Welsh PV industry, there appears to be some validation that diversity in the technologies being developed within the regional innovation system will allow the sector to be resilient in the medium-term. • Some unresolved short-term challenges with thin-film market readiness. • Perhaps analogous with hydrogen in (Wells & Harper, 2012). • Many promising avenues for potential development – technologies in the process of commercialisation / being brought to market. • Potential to capture value from balance of system components.
  25. 25. Adger, N. (2000) ‘Social and ecological resilience: are they related?’, Progress in Human Geography, 24, 347–64 Ashton, W. S. (2009) ‘The structure, function, and evolution of a regional industrial ecosystem’, Journal of Industrial Ecology, Vol.13No.2,pp. 228-246 Chertow, M. R.; Ashton, W. S. and Espinosa, J. C. (2008) ‘Industrial symbiosis in Puerto Rico: Environmentally-related agglomeration economies’, Regional Studies, Vol.42 No.10, pp.1299-1312 Colville, F. (2014) ‘Trina Solar Dominated UK Solar PV Module Supply in 2013’ uk-solar-pv-module-supply-2013 Duit, A., Galaz, V., Eckerberg, K., and Ebbeson, J. (2010) ‘Introduction: governance, complexity, and resilience’, Global Environmental Change 20, 363–368 Fiksel, J. (2003) ‘Designing Resilient, Sustainable Systems’ Environmental Science & Technology, 37 (23), pp 5330–5339 DOI: 10.1021/es0344819 Hall (2013a) Solar energy research centre launched by Swansea University, launched-6194611 Hall (2013b) Pure Wafer in profit after transformational year, 6119388 Harper, G.D.J, Rowlands-Jones, R, Irvine, S. (2014) A Skills and Training Needs Analysis for Solar Photovoltaics a Welsh and UK Perspective, 5th International Conference, Education, Research & Development, Elenite, Bulgaria 4-8th September 2014 Harper & Wells (2012) Diverse regional sustainability strategies: template for the future or squandered resources? International Journal of Automotive Technology and Management, 12(2), 153-171. DOI: 10.1504/IJATM.2012.046860. Hudson, R. (2008) ‘Material matters and the search for resilience: rethinking regional and urban development strategies in the context of global environmental change’, International Journal of Innovation and Sustainable Development, 3, 3/4, 166–184 Hughes (2013) 'Work together' after devastating job cuts in Wrexham Irvine, Jones & Rowlands-Jones (2013) Key recommendations from ESP KTN Solar Photovoltaic Road Map 2013 Lucas (2013) ‘Sharp closure ends decade of UK solar innovation’ Shankleman, J (2012) ‘Sharp relocating solar HQ from Germany to UK’, The Guardian Rowlands-Jones (2014) Skills and Training Needs Analysis: Solar Photovoltaics Energy Executive Summary
  26. 26. Gavin Harper @gavindjharper @CSER_PV @LCRI_WEST If you found any of this interesting… Please stay in touch