Australia plots leap from world-leading solar R&D to global solar manufacturer?

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

It’s a question that’s coming up a lot, lately, as a newly-elected Labor government talks of reviving Australian manufacturing, as fossil fuel costs send grid prices soaring, and as a war on top of a pandemic disrupts supply chains just as the shift to renewables needs to shift up several gears.

In announcing the Albanese government’s $45 million extension of funding to the Australia Centre for Advanced Photovoltaics last month, federal energy minister Chris Bowen sized up the solar challenge.

 “The solar panels around the world, the technology that’s in them, in no small part was invented here [at the University of New South Wales] and in other Australian universities. That’s something we can be proud of. But we’ve got to take it now to the next step.

“We’ve put 60 million solar panels on roofs in Australia in the last 10 years. One per cent of them have been made in Australia. That’s got to change. This is Australian technology; we want to see more of it made in Australia,” Bowen said.

Of course, this would be good for jobs and for the economy, but one of the key reasons it will benefit Australia to build up some local solar manufacturing muscle is simply to meet its own needs.

According to the Step Change scenario of the Australian Energy Market Operator’s 2022 Integrated System Plan, Australia will see a five-fold increase in rooftop solar PV, alone, which will provide more than twice as much generation than a dramatically diminished coal fleet by 2030.

And then there is the all the solar that will be needed to build out the growing number of renewable hydrogen focused mega-projects being proposed around the country.

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

Solar will also feature hugely in the massive 26GW Asia Renewable Energy Hub in W.A. now being led by BP, and in the 50GW Western Green Energy Hub proposed by its partners. Where all that solar will come from is still a work in progress, but the developers agree it can’t all be shipped from China.

Last week, International Energy Agency chief Fatih Birol warned that while China had played an instrumental role in bringing down solar costs and supplying the global market, its domination of the global supply chain was becoming a major liability to the global shift to net zero.

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

So can Australia take up the opportunity?

This is a question the Australian PV Institute is currently examining in detail, including through its PV Manufacturing project, which is working on a three-step process to assess the opportunities for increased or new local manufacture up and down the solar supply chain.

Professor Renate Egan, who is secretary of APVI, while also leading the UNSW activity in the Australian Centre for Advanced Photovoltaics – and with 20 years experience in solar cell manufacturing – is in as good a position as anyone to judge.

Egan says one of the key first steps will be to establish how big the local market needs to be before you can get other supply chain players – such as in aluminium, glass and steel – to get on board.

“If you look at China, the reason China has got where it is today is because they have had the confidence in the downstream market; the supplier then doesn’t have to take as much risk in supplying the product.

“China’s government basically said, we could support a 100GW market, so let’s manufacture at that level and if we can sell some overseas, great!’

“That’s the sort of confidence we need,” Egan told RenewEconomy on Friday. “Let’s back ourselves.”

Egan says APVI’s early estimates of the Australian market suggest it could support around 1GW a year of local module manufacturing.

“We currently have a 4GW a year market, so it’s not unrealistic that we have a gigawatt of local manufacturing.” The big question, she adds, is local manufacturing of what?

“It doesn’t make sense for everybody to do everything. There’ll be elements of the supply chain where we will be able to do more, and we’ll be good at it, while there will be other parts that don’t add up economically.”

On the economic side, another key ingredient to establish solar manufacturing in Australia will be capital – and lots of it.

As fellow UNSW Professor Martin Green pointed out at a recent conference, China’s dominance of the global solar supply chain wasn’t borne entirely from robust and unwavering government support.

Rather, in the early 2000s, when the government was a bit more focused on wind power, Green says it was finance from US investors that built up the Chinese industry.

“Between 2005 and 2010, there were 10 Chinese-based companies that listed on the New York Stock exchanges, and six of those were in the top 10 manufacturers in 2022,” Green noted.

Happily, Egan says there has been “a lot of enthusiasm” for Australian solar manufacturing at the big end of town.

“When you look at the Fortescues of the world, their success was based on the fact that they own the full supply chain. They put in their own railroads and ports to export. They backed themselves and controlled all the costs that way.

“Somebody like that could have the capacity to do this in solar,” Egan says. “It may or may not make economic sense right now, but they will own the quality, the processes, and remove the supply risk.”

Ultimately, a lot of it will come down to cost. As Green pointed out, China is producing extremely high quality product very cheaply. So it’s very difficult for any manufacturing activity in another country to compete on either of those two terms.

Egan says that while economics may rule Australia out of cell processing, for example – due to the cost of the manufacture and maintenance of the equipment, which she describes as “an expertise of its own” – there are other parts of the chain that can be pursued.

“My gut feeling is that it will be in silicon refining that we’ll be strong. …We could then ship it to turn into wafers and cells and then have those shipped back. The [module making] including the glass and aluminium could then be done here.

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

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

“The process [of making solar] is quite complex and people looking at the industry from the outside tend to think ‘surely there’s an easier way to make this.’ People are thinking of revisiting thin film…

“We have seen some big plans that have gone into solar before and a few of them have been burnt along the way.

“We have a lot of hard-earned expertise in Australia and we want to be making the right decision. We don’t want to squander the faith of investors willing to back a local solar supply chain.”

By:  Sophie Vorrath 

From: https://reneweconomy.com.au/australia-plots-leap-from-world-leading-solar-rd-to-global-solar-manufacturer/