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1. Solar Silicon Prices Dropping, New Energy Finance Says
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2. Can Ocean Power Keep Its Head Above Water?
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3. Daimler to Build $9.9M Hybrid Tech Center in Michigan
Solar Silicon Prices Dropping, New Energy Finance Says
Jennifer Kho - polysilicon
Solar-grade silicon prices are falling — at least according to the latest New Energy Finance report due out this week. Back in August, the London-based research firm forecast that prices would fall in 2009, and Jenny Chase, a senior associate at the firm, tells us that the prediction appears to be coming true. The conclusion is the opposite of one that another research company, Photon Consulting, presented earlier this month forecasting that prices will rise this year.
The price of silicon, the active material at the core of most of the solar market, is important because it plays a major role in setting solar-panel prices and margins. For the last few years, a shortage of solar-grade silicon increased prices all along the manufacturing chain, boosting panel prices — and margins — as their supply failed to keep up with the perceived demand.
“Spot prices” — the most current value of silicon being traded on the open market — are considered the leading bellwether of silicon prices because they are more responsive to market changes than long-term contract prices, which are set months — and even years — in advance. If spot prices are far higher than contract prices, that indicates that silicon is worth more than it was expected to be worth when the contracts were signed, while significantly lower prices indicate the price of silicon has fallen more than expected.
Chase says spot prices have fallen to one-half or even one-third of their prices late last year, bringing them below longer-term contract prices. As a result, some solar companies are renegotiating their silicon contracts to get prices more in line with those spot prices, and some silicon companies have started offering their customers more silicon for the same price. “There is certainly evidence that spot prices have fallen and contracts which were thought to be quite firm are starting to be looked at again in a new light,” Chase says.
As solar panel prices start to fall amid gloomy predictions of a worsening oversupply, industry insiders are watching silicon prices for a hint of the future. While plenty of other factors play into the equation, plummeting silicon prices might indicate that solar-panel prices could continue to fall steeply for some time, while higher silicon prices might indicate that solar-panel prices are stabilizing.
But low silicon prices could be both good and bad. They would mean lower costs for solar manufacturers, which could enable them to become more competitive with conventional electricity, in turn growing the solar market. But they also could indicate lower profit margins and more competition in the short-term, if they represent an oversupply compared to demand. Either way, they most certainly would represent change and a market shakeout that could put new winners on top.
The news from New Energy Finance comes after some conflicting evidence that prices could actually be rising. According to Ed Gunther, author of the Gunther Portfolio blog, Rogol reported last week that silicon spot prices averaged between $100 and $180 per kilogram in the first quarter, compared with long-term contract per-kilo prices that range from $50 to $90. “This appears to signal polysilicon is not in oversupply,” Gunther wrote. “Otherwise, the spot price would have crashed below the long-term contract price.” Rogol also forecast that spot prices would climb to between $125 and $250 per kilogram during the rest of the year, he wrote.
The question is complicated by the fact that contracts don’t all fall into line with either theory. In other words, some companies signed contracts at lower prices than the current spot market, while others are locked into higher-priced contracts. And spot prices are notoriously difficult to track. A year ago, DigiTimes reported that spot prices for high-purity silicon had grown to between $450 and $470 per kilogram, while Travis Bradford, president of research firm Prometheus Institute, estimated they were closer to $120 per kilogram.
With the widely disparate chatter, it’s impossible to know for sure where spot prices are headed. But one thing, at least, is clear: You can expect far more speculation — and disagreement — about these prices in the months to come.
Can Ocean Power Keep Its Head Above Water?
David Ehrlich - Big Green
Most of the Earth’s surface is covered by water, so it seems like it would be a great idea to harness all that wave and tidal power and turn it into electricity. But so far, that’s pretty much what it is — an idea. Earlier this week, Pelamis Wave Power told the International Herald Tribune that it’s pulled its three wave power generators out of the water off the coast of Portugal due to technical and financial difficulties.
The move at Pelamis’ Agucadoura wave farm project reduces the already small number of wave and tidal power projects actually in the ocean. According to data from the U.S. Department of Energy’s Energy Efficiency and Renewable Energy office, there are only 21 projects around the world that have devices operating in the ocean, grid-connected or not.
But the data has yet to reflect the Pelamis generators being put in drydock, so that number should go down to 20. And Verdant Power is still on the list, too, but that company had its tidal turbines mangled by the East River in New York back in 2007. There’s no word on whether its turbines are back in the water, so the figure could actually be 19. And who knows how long until that number goes down again?
To be fair, ocean power is experiencing the same growing pains that any new technology has to struggle with — we didn’t get to over 47 gigawatts of worldwide wind generating capacity overnight. But the struggles of the ocean power industry are being made all the more harrowing by the global credit crunch.
And regulatory hurdles aren’t helping. Vancouver, British Columbia’s Finavera Renewables decided to get out of the wave power game when its plans with PG&E for a 2-megawatt project in California were dashed by the state’s Public Utilities Commission.
But that hasn’t stopped San Francisco Mayor Gavin Newsom from pushing ahead with some bold plans for up to 100 MW of wave power in the Bay Area just last month . And earlier this year, Lockheed Martin teamed up with Ocean Power Technologies to develop a utility-scale wave power project off the West Coast.
Well, those groups and others may need the patience of Job to get over the regulatory and economic hurdles involved in getting a device into the water. If they do manage to hold out, then maybe we’ll see that ocean power database number actually go up.
Photo of Portugal wave farm (while it was still in the water) courtesy of Pelamis
Daimler to Build $9.9M Hybrid Tech Center in Michigan
Josie Garthwaite - Automotive
Less than six months after Michigan lost one high-profile R&D center for alternative-fuel vehicles (that of Tesla Motors, shuttered last fall), the state has wooed another: Daimler AG’s Mercedes-Benz Hybrid subsidiary plans to build a $9.9 million R&D facility in southeast Michigan for propulsion systems that can be used in alternative-fuel as well as conventional vehicles.
Lured away from an alternate site in South Carolina by $7.5 million worth of state tax credits over the next decade (approved yesterday), and possibly more tax incentives at the local level, the automaker will create more than 450 jobs with the project, according to an announcement from the office of Michigan Governor Jennifer Granholm.
Daimler has taken up a series of alt-fuel vehicle ventures in recent months. The luxury automaker hatched a deal with Tesla Motors earlier this year to get battery packs and chargers from the startup for the 1,000 electric Smart cars that Daimler has slated for release in the U.S. in 2010. Across the pond, Daimler partnered with Italy’s largest electricity producer, Enel, late last year to roll out more than 100 electric Smart Fortwos for testing with vehicle-charging stations by 2010. The company has a similar program in Berlin, and plans to launch others throughout the U.S. and Europe.
Don’t expect Daimler to keep all of the systems planned for development at the Michigan lab to itself. Marketing them to outside companies, the company would not be the first to pursue alt-fuel vehicle components supply for extra cash in the early stages of electric car development. Already, Daimler has taken a 90 percent stake in a joint venture with Evonik Industries AG of Germany to develop lithium-ion batteries for its own vehicles — and eventually third-party manufacturers. According to a report in Germany’s Handelsblatt this week (picked up by AFP), the company is now on the hunt for a second partner for the enterprise.
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