Cru silicon forum spain 2014

© Viridis.iQ
CRU Silicon Forum 2014
12 November 2014 , NH Constanza, Barcelona, Spain
Untapped potential
New countries and regions that will fuel solar silicon growth
Dipl. Eng. Lou Parous

© Viridis.iQ CRU Silicon Forum 2014 - 12 November 2014 , NH Constanza, Barcelona, Spain
Topics
 Brief introduction
 PV related Silicon scenarios
 Influence and effects on Silicon Metal sector
 Impact of greenfield expansion on PV sector
 Stress relief options
 Conclusions

 Providing your project team
with a holistic view based on
operations, technology &
commercial industry
expertise
 Crossover expertise in
ferroalloy production and
engineering (FeCr, FeMn,
FeSi) and downstream
silicon metal application
knowhow (Chemical and
Aluminium)
 Viridis.iQ GmbH is a German
engineering, project
development, operations and
consulting firm with unique
technical, business and financial
experience on each step of the
photovoltaic value chain
including metallurgical silicon,
polysilicon, ingoting, wafering,
solar cell and modules, along
with proficiency in thin film
technologies and innovative
process engineering
Brief Introduction
Experience and knowhow

• Industrial process design, engineering, knowhow transfer and process engineering for
metallurgical silicon, ferroalloy and solar manufacturing technologies.
• Financial and Market assessments of the Solar Sector
• Greenfield, Conversion and Upgrade projects all along the supply chain,
PROCESS AND
KNOWHOW TRANSFER
EXPERTISE
TECHNICAL SERVICES FOR
PLANNING,ENGINEERING AND
EXECUTION
Brief Introduction
Full Scope Technical Services

8150 furnace ramp ups, warm and cold
and start ups
1029 Electrode Burn Downs
121 Södeberg electrode transitions
13 furnace optimization programs 6 development programs on silicon
and ferroalloy casting
4 system developments for silicon
milling24 furnace reformations
231 furnace tap hole
reformations
48 Distinct Lean Six Sigma projects120 Lean Six Sigma specialists
trained
Ferroalloy and Silicon Production Metrics
Facts and Figures
>500 000 tons managed
70 years of accumulated silicon
production experience in-house

Brief Introduction
Publications and Appearances

 The emerging markets will
gain a significant share of
the future PV world map.
 Aside from policy driven
instruments, 100 GWs
installed capacity is real
possibility by 2020
 Resulting in an overall
demand of 441/3303
grade mgSilicon of more
than 700k tons per year.
 Milling capacities of equal
value are needed
 Growth driver is grid-parity that is achieved in many
regions of the world for different type of customers
(consumer, commercial and even utility)
PV Related Silicon Scenarios
Strong PV Demand expected to continue
source: Peer group of external sources, Viridis.iQ
PV installation forecast by region

Where is the PV expansion taking place?
 Regional diversification with
emergence of new high-volume PV
markets leads to lower cyclicality in
end-markets
 Better predictability of PV related
feedstock needs decreases
investment uncertainty for mg-Si
expansions
 Largest volumes to be absorbed in
Asia Pacific and Europe with
expected mg-Si demand in excess of
500 k tons
 While Americas are catching-up with
a CAGR of ~15% over the period
from 2014-20e and total expected
mg-Si need of 160 k tons in 2020
Mid-term high-volume PV markets
Resulting PV related mg-Si feedstock need by region
0,0%
5,0%
10,0%
15,0%
20,0%
0
200
400
600
800
1000
2014e 2015e 2016e 2017e 2018e 2019e 2020e
[kmt]
Europe Asia Pacific
America Middle East & Africa
RoW growth
Potential new regions
of polysilicon
production

What drives local manufacturing
Drivers Root cause
Valuation of energy supplies Countries that have large natural gas/oil reserves that
want to add value to the resources in country instead of
exporting energy units
e.g. KSA, Oman, UAE, Qatar, Trinidad, Iceland
Advanced manufacturing skills
creation
Countries that seek to raise the skill sets of local labor
resources into high tech areas
e.g. Algeria, Egypt, KSA, Qatar
Country energy-mix diversification Countries that see higher energy costs in their future
and seek to increase the renewables mix
e.g. South Africa, Turkey, Greece, Brasil, India, USA
Transformation of economic
drivers
Countries who need to increase diversity in their
economies
e.g. Trinidad, Qatar, KSA

 Silicon is the primary raw
material for Poly-Si
production
 The quality of silicon metal
is crucial for polysilicon
production
 …and the quality of the
silicon is a function of of
the quality of the raw
materials
 …which may also impact
costs as better quality raw
materials usually demand
higher prices
Influence and Effects on Silicon Metal sector
What volumes does this represent?

2020 Estimated market share
(est. 3.25 million tons)
2010 market share
(est. 2.0 million tons)
36%
47%
17%
30%
43%
27%
2010 Silicon Demand 2020 Silicon Demand
Resulting demand and influence on silicon market

Brasil
 3 year dry season
 Production curtailments (sell off)?
 ABRAFE contracts end 2014
 Projection of future energy prices 7-9
cents/KwH, some cases higher
 Value added strategies not forthcoming
S.Africa
 Long term viability of ferroalloy industry
in question
 Conversion from other metals could
have short term effect on supply
China
• Rising costs, raw materials
• Increased bleed through of new factories
• Increasing energy costs
• Environmental overhaul
GCC
 Bubble in the making or rational
repositioning?
 Auto production impact could be a
game changer
 Huge potential for local PV demand
Potential new, planned or expanded Silicon Metal plants
Malaysia
 Advertised silicon production
remains to be seen
N. America
• Legal problems slow/halt projects?
• Added capacity will not affect external
market
• Sustainability of shale gas related
manufacturing expansion remains to be
seen
Source: Viridis.iQ GmbH
Global activity driven by low energy prices

Impact of greenfield expansion on PV sector
Don’t celebrate yet!
 There is a relative explosion of greenfield silicon metal activity
 That could add approximately 300,000 tons of new silicon capacity by 2020
 But that does not mean 300,000 tons evenly split among the Chemical,
Polysilicon and Aluminum industries
 But some activity is also based on collaborative approach (mgSi for poly-Si)
Some greenfield
plants will only
support local non-
PV demand or will
be limited in export
permissions
Poor knowhow in
operations and mistakes
in technology and/or
engineering choices
can limit product grades
flexibility and
consistency, as well as
project schedule
Captive Supply Knowhow Limitations Raw Material Limitations
Access to higher quality
raw materials often
underestimated by new
projects…not to mention
lower volumes never get
best procurement prices

Operations Expertise Critical?
 Current trends for greenfield expansion in Silicon
 Tier 1 or Tier 2 producers which have in house expertise and manpower
 New entrants which depend on technology provider and one man consultants
 Technology providers do not operate silicon factories!
Result is that new silicon projects will not all be on the same footing in regards to
quality, consistency, project timing, profitability, flexibility and technical acuity
LevelofTechnicalandOperations
ExperienceintheProjectTeam
Level of Project Risk
• New entrant Greenfield projects need
specialized teams of silicon operations
experts to support project owners
• ….to provide a counterbalance to technology
provider, and
• ….to ensure smooth project start up and
product quality targets,
• ….as well as increase the flexibility of the
factory to meet new market demands for the
PV, Aluminum and Chemical sectors
Tier 1,2
projects
New
entrants

Source: Myrvågnes, 2008 and D.Oliveira, 2013
Consistent practices?
 Survey of carbon sources among silicon producers does not show a consistent
practice
 This can impact Silicon Metal quality and consistency in polysilicon production
 As well as the more important issue of even meeting specifications

EU considers Silicon Metal as a Critical raw material
http://europa.eu/rapid/press-release_MEMO-14-377_en.htm
Economic importance:
This analysis is achieved by assessing
the proportion of each material
associated with industrial megasectors at
an EU level. These proportions are then
combined with the megasectors’ gross
value added (GVA) to the EU’s GDP.
This total is then scaled according to the
total EU GDP to define an overall
economic importance for a material.
Supply risk:
in order to measure the supply risk of
raw materials, the World Governance
Indicator (WGI) was used. This indicator
takes a variety of influences into account
such as voice and accountability, political
stability and absence of violence,
government effectiveness, regulatory
quality, rule of law or control of
corruption.
Substitutability index:
A measure of the difficulty in substituting
the material, scored and weighted across
all applications. Values are between 0
and 1, with 1 being the least
substitutable. Silicon metal has an index
of 0.81 behind materials such as
Geranium and Indium.
 The EU considers Silicon Metal a critical raw material that is
not very substitutable, exhibits a notable supply risk and has a
relevant economic importance
 This is counter to what many in the industry think as common
knowledge, e.g. that silicon metal is a base commodity that is
widely available at a cheap price with quality having a relative
low importance. “silicon is silicon is silicon” mentality.

• Technology developments on recycling continuing
• Milling
• Kerf
• If used as mgSilicon, total recycled kerf and milling
wastes could be equivalent to several Silicon Metal
smelters
Stress Relief
Can recycling add capacity to the market?

Milling/Grinding Fines
from Polysilicon
Kerf Wastes
Photo Credit: Viridis.iQ GmbHPhoto Credit: Fives Group, France
40 000 tons / yr 90 000 tons / yr
Stress Relief
 Milling wastes are usually
not re-consumed by the
silicon metal producer
 Some Direct chlorination
producers can use large
portions of milling fines
 Kerf wastes can be cleaned
of SiC contamination to
return the remaining silicon
to standard silicon metal
specifications
 Recycled kerf can also have
the added benefit of
reduced dopant levels that
can reduce distillation costs
in polysilicon

SEMofRecovered
Siliconfrom
KerfWaste
SEM Gas
Atomized Silicon
SEMofmilled
siliconwastes
Source: “Multi-scale chemical characterization of a
ground metallurgical-grade silicon powder”, Eloi Kewes,
et al. , Bluestart Silicones, Laboratoire de Tribologie et
Dynamique Systems, Aix-Marseille University
Stress Relief
Source: Caloric.com
Polysilicon Factory
2020: 80,000 tons per year
2020: 210,000 tons per year

Conclusions
 PV installations remain on strong trend lines and have good fundamentals with 100
GW/year foreseeable by 2020 which will require >700k tons per year of Silicon
Metal
 Silicon metal expansion has started after decades of hiatus…but will not be
enough to meet demands even from the PV sector alone, and;
 will not be available to all industries due to trade barriers and quality issues
 will need knowhow transfer to experienced operations teams to support new
entrant projects or face high project risks
 Leaving open possibilities for stress relief from recycling activities that are
becoming financially attractive
 PV sector demand will likely match Chemical sector by 2020
 …but will have different dynamics and leverage in the
market than the big chemical companies
 Strong financial base case for Silicon Metal investments

Cru silicon forum spain 2014

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