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Shell's Showa Solar Plans 1-Gigawatt Plant

The Japanese unit of Royal Dutch Shell reportedly will spend almost $1 billion to build one of the world's largest thin-film plants.

Showa Shell Sekiyu plans to spend about 100 billion yen ($944 million) to build a manufacturing plant capable of producing a whopping 1 gigawatt of thin-film solar panels per year, according to the Nikkei.

The Japanese subsidiary of Royal Dutch Shell hasn’t officially announced the news or released further details, but Forbes reported Wednesday that the company confirmed it is considering building a large-scale solar plant.

Showa entered solar production last year with its first solar-cell plant, which has a production capacity of 20 megawatts. In August, the company said it would build a second factory with the capacity to produce 60 megawatts.

A gigawatt of capacity would be a significant leap. To put it in perspective, global solar-cell production reached a total of 3.7 gigawatts in 2007, according to the Prometheus Institute, which forecast that thin-film solar production would reach 1 gigawatt this year. Germany, the largest solar market, installed just over 1 gigawatt of solar capacity last year.

It’s not the first super-sized thin-film plant in the works, but it is the latest sign that companies plan to dramatically expand the size of the market.

Sharp Corp. in November said it is building a 1-gigawatt thin-film plant in Japan. Meanwhile, First Solar – the No. 1 thin-film manufacturer today, which makes cadmium-telluride films – plans to reach 1 gigawatt of capacity by 2009, and Oerlikon and Applied Materials have announced orders for amorphous-silicon-making equipment that amounts to another gigawatt of capacity (see Thin-Film Solar Production to Leap Forward).

According to Showa Shell’s Website, the company makes solar panels from copper, indium and selenium (CIS).

CIS is based on some of the same elements as the copper-indium-gallium-deselenide films that competitors such as Nanosolar, Miasolé, HelioVolt and Global Solar are developing. CIS films are easier – and potentially cheaper – to make than CIGS, according to Solid State Technology, but they also convert sunlight into electricity less efficiently.

A study by the National Renewable Energy Laboratory in 2005 reported a record efficiency of 15 percent for CIS cells, meaning the “champion” cell was able to convert 15 percent of the sunlight that hit it into electricity, under laboratory conditions. That compares with a record-breaking CIGS cell with 19.9 percent efficiency that the lab announced in March.

Thin-film solar technologies use little or no silicon, a potential advantage given today's worldwide shortage of solar-grade silicon.

Cadmium-telluride films, led by First Solar (NSDQ: FSLR), make up the largest portion of the thin-film market, followed by amorphous-silicon films.

Other thin-film companies, such as Miasolé, HelioVolt, Nanosolar and Global Solar, are pushing hard to grab a piece with CIGS. But so far, none of the CIGS companies has managed to reach mass-market production.

Rick Hanna, an equity analyst for Morningstar, said the timing of Showa’s news is interesting, as it comes a week after reports that Japan is considering bringing back solar subsidies (see Japan Wants to Resurrect Solar Incentives).

Hanna said government subsidies could catalyze demand in industries like solar. But he also doesn't think Showa's plans to build a 1-gigawatt plant is a game changer.

"It's one thing to announce big capacity, but it's another to have it on the floor," he said.

Showa has a lot of challenges ahead, including raising financing for such a large plant and facing plenty of competition as more companies enter thin-film.

"They are joining a crowded party," he said.

Get the forecast for Concentrating Solar Technologies at our seminar at Intersolar North America July 14, 2008 in San Francisco. Click here to register or for more details.

Comments [2]

  • Steve Pluvia 07/3/08 5:06 AM

    Typical idiot analyst:

    Rick Hanna, an equity analyst for Morningstar:

    “Showa has a lot of challenges ahead, including raising financing for such a large plant and facing plenty of competition as more companies enter thin-film. “They are joining a crowded party,” he said.”

    Ummm yea…  Shell Oil will have one heck of a time finding $1b in a time they’re reporting record profits every single quarter, to finance a project that produces carbon credits which they would other wise need to pay $ to buy.

    ”....and facing plenty of competition as more companies enter thin-film.”

    Uh-huh competition.  Despite the fact demand for grid parity PV [which CIS will produce] will exceed supply for more than 10yrs.

    The whole-sale lack of talent all Wall Street is astounding.

    Steve Pluvia

     Reply
  • Ronald Adamowicz 07/5/08 5:43 PM

    July 01, 2008 | Press Release


    Sustainable Power Corp. Enters Into Strategic Alliance With Pemco Energy AS to Form “SSTP Europe”

    Pemco Energy AS Will Contribute Equity Cash Into SSTP Europe and Has Entered Into a Stock Subscription Agreement for 50,000,000 Restricted Shares in SSTP

    Baytown, Texas—07/01/08—

    Sustainable Power Corp. (PINKSHEETS: SSTP) is pleased to announce today that it has finalized a strategic alliance with Pemco Energy AS, a Norwegian-based corporation.

    Pemco Energy AS (“Pemco”) is part of the Pemco Group which is a European trading and industrial group with manufacturing, distribution and sale of oil and chemical based products. The group is represented in 18 countries, and has a major international profile. Pemco is headquartered in Oslo, Norway.

    In the multifaceted agreement, SSTP and Pemco will form “SSTP Europe” to be the exclusive representative for SSTP across Europe. The joint venture intends to install, own and operate plants, produce and market green biofuels, including the use of biofuel for power generation, as well as generate green certificates. Pemco will be responsible for the setup of necessary organization to enable SSTP Europe to perform operations of all the plants across Europe, including setup of long-term contracts with power companies. Pemco, in close cooperation with SSTP, will seek to secure long term agreements of low-cost sustainable feed stock from major land areas in Eastern Europe, as well as network to South America, Australia, and Africa. The agreement further provides for the contemplated financing of SSTP Europe.

    Furthermore, Pemco has entered into a stock subscription agreement for 50,000,000 restricted shares of SSTP stock for consideration of $2 million USD. Additionally, Pemco has agreed to contribute $6 million USD to the buildup of SSTP Europe.

    Mr. Bjoern Knappskog, majority owner, President and Chairman of the Board of Pemco, stated, “We are pleased entering into this strategic alliance agreement and look forward to commercialize this new effective biocrude technology based on sustainable biomass sources across Europe.”

    John Rivera, Chairman of SSTP, stated, “The key personnel of Pemco have a long history of establishing successful international transactions. Collaborating with Pemco and Mr. Knappskog is a major milestone for Sustainable Power Corp. Pemco Energy AS has the experience, personnel, financial resources and ‘green’ background to bring about the successful commercialization of SSTP across Europe.”

    About Pemco Energy AS

    Pemco Energy AS is part of the Pemco Group, which is a European trading and industrial group with manufacturing, distribution and sale of oil and chemical based products. The Group is represented in 18 countries, and has a major international profile. The Pemco Group realized revenues of approximately $500 million USD last year.

    About Sustainable Power Corp.

    Sustainable Power Corp. is an international green energy total service provider focused on environmentally safe power generation. The company has the exclusive rights to develop and manage a portfolio of green energy plants utilizing a biocrude discovery, a renewable fuel source able to be produced from non-food feed stock. For more information please visit http://www.sstp.us.

    Reply

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