Subsidies to fuel solar power's future in Singapore

Expert wants these in Singapore but Govt says market forces better in the long run
Lin Yanqin, Today Online 28 Nov 07;

ALTHOUGH Singapore will soon be home to a solar manufacturing complex that would make enough products to power millions of households, it could take some time for these solar panels to find their way to buildings here.

The higher cost of solar energy relative to power generated from traditional sources, is one key reason, said Mr Erik Thorsen (picture), president and chief executive officer of Renewable Energy Corporation (REC), which is building the $6.3-billion plant.

Another factor, in his view: The lack of subsidies and incentives from the Government for businesses and households to switch to solar power, unlike the case in Germany or the United States.

"Price is everything," Mr Thorsen told Today. "People won't buy expensive power just because it's more environmentally friendly. The long-term strategy is to make solar energy cost-competitive."

At the Energex 2007 conference earlier, Mr Thorsen had said that fossil fuel reliance could not continue over the next few decades, in light of climate change and growing global energy demand.

"The (solar) industry will have to take responsibility by lowering prices, with governments supporting with incentives."

He added: "Singapore has a philosophy of not subsidising or subsidising very little. So, it's very hard to make use of technologies and programmes that need more incentives to happen."

Were all countries to share Singapore's attitude of waiting for technology to become cost-competitive before adopting it, such technology could not have been accomplished, he argued.

In reply, Dr Amy Khor told Today the adoption of green energy would be more sustainable in the long run if left to market forces.

"The Government isn't against subsidies, but we take a cautious stance," said the senior parliamentary secretary for environment and water resources.

A Trade and Industry Ministry spokesperson also said in reply, "Even as we want to promote the use of renewable energy, we have to consider the impact on business costs and costs of living.

She said consumers "will have less motivation to conserve energy" if energy prices are "artificially" low. "Furthermore, subsidies, if applied unevenly or only to certain energy technologies, will distort the level playing field in the electricity market. We may also need to raise taxes to fund these subsidies," she said.

Added Dr Khor: "Our priority is in R&D and education, which could eventually help to bring prices down and bring up demand."

The National Research Foundation has set aside $170 million for R&D in clean energy. There are also schemes to support domestic adoption of new technologies, such as the $17 million Clean Energy Research and Test-bedding programme, and investment in energy efficiency technologies, such as the Building and Construction Authority's Zero Energy Building.

Mr Thorsen said a "good and stable" infrastructure was what drew REC to invest in Singapore. He does not foresee a problem in finding skilled manpower; in the early stages, employees would be flown to Norway for training.

Singapore, he said, also had a "liberal attitude toward importing competence", which could meet the plant's needs, which would be in high-level engineering, such as metallurgical skills, mechanics, and microelectronics — the last of which Singapore has expertise in.

If all goes well, the plant could be up and running by late 2009 or early 2010, he said.

Solar firm to train 1,500 staff next year
Renewable Energy will send first batch of new workers to Norway for extensive training
Jessica Cheam, Straits Times 28 Nov 07

NORWEGIAN solar firm Renewable Energy Corporation (REC) aims to train up to 1,500 Singaporeans for solar industry jobs next year, in the first phase of its recruitment drive.

Last month, Singapore trumped more than 200 locations to emerge as REC's choice to build the world's largest integrated solar manufacturing plant - at a cost of $6.3 billion. When fully operational, the plant expects to hire up to 3,000 staff.

Now, the Singapore workforce is set to get a boost in solar manufacturing know-how, as REC intends to send workers it hires to Norway for extensive training lasting up to a year.

This follows a $25 million scholarship programme unveiled recently by Singapore's Economic Development Board (EDB) to groom technology leaders for the fast-emerging clean energy sector.

Speaking in detail for the first time since REC announced the project, its president and and chief executive, Mr Erik Thorsen, said yesterday he recognised that training was crucial to support Singapore's fledgling solar industry.

Mr Thorsen said REC would look for people with the right background, from post-doctorate students to engineers and factory operators.

'Singapore is not the cheapest market for manufacturing, but it does have a high level of competency in its workforce,' added Mr Thorsen. It helps that the country already has a strong chip industry, which is similar to solar manufacturing.

This, coupled with a strong commitment from the Government to develop the clean energy sector, made Singapore 'a fairly safe choice'.

What is currently lacking in Singapore, he said, is domestic demand to stimulate a local industry in the Republic, as it enables a 'good feedback process and learning curve'.

This can be done through research and development (R&D) programmes and government incentives for adopting the technology, he said.

Already, $50 million has been dedicated to an R&D fund for the next five years, under the EDB's direction, to kick off clean energy production. But there remains no indication that the Government will provide incentives for individuals to adopt solar energy in Singapore.

Mr Thorsen estimates that grid parity will be reached by countries in the sun belt - near the equator - by 2010 to 2012, and REC will be positioned to tap the exploding growth.

Grid parity is when it will be as cost-efficient to get electricity from the sun as it is from the conventional way of burning fossil fuels.

'Already, in some parts of countries like America and Japan, it is already competitive to use solar,' he said.

The real challenge lies in the world's manufacturing capacity to keep up with demand.

Still, for the next three to five years, current capacity can support an industry growth of 40 per cent, he said. With oil prices reaching US$100 a barrel and the upcoming revision of the Kyoto Protocol, Mr Thorsen said the cost of solar energy would only become more attractive in comparison to fossil fuels.
Additional reporting by Shobana Kesava

Building of solar cell plant to start next year
Matthew Phan, Business Times 28 Nov 07;

CONSTRUCTION of a major $6.3 billion solar cell plant here by Norway's Renewable Energy Corp (REC) is expected to start by the first quarter next year, company president and CEO Erik Thorsen said yesterday.

Announced late last month, REC's plant will eventually produce 1.5 gigawatts of solar generating capacity a year and will be the largest of its kind so far.

REC is going through the 'final engineering' and expects ground-breaking to take place next year, said Mr Thorsen, who gave the keynote speech at the opening of the energy conference Energex 2007 here.

The first phase - 'major hiring' of up to 1,500 workers - will happen in the second half of 2008, he said in an interview later.

Construction will generate substantial demand for services from Singapore- based engineering and building companies, and the plant will need specialised sub-suppliers when it is up and running, according to Mr Thorsen.

A key component in the manufacture of solar cells is 'slurry', a liquid mix that contains silicon carbide. Wires used to cut silicon into wafers for solar cells are coated with the tough silicon carbide particles, which do the actual cutting.

At REC's plants in Norway, large volumes of slurry are used and recycled, with pipes containing the mix running in and out of the factories, said Mr Thorsen.

Other needs are for glass - 'making so many solar modules would require a significant volume of glass' - chemicals, gases, water and electricity to be used in the plant, he said.

REC hopes to halve the cost of making solar cells by 2010, in a bid to make solar energy cost-competitive with electricity bought off the grid.

So-called grid parity could be achieved by 2015 across most countries in the sunbelt, and by 2010 in countries where energy prices are high, such as Singapore, said Mr Thorsen.

REC's plant in Singapore will use 'fluid-bed reactor' technology for producing silicon.

Acquired and developed by REC, this process reduces the energy used to make polysilicon, a raw material, by 70 per cent and brings material cost down by almost a third.

The plant will also make thinner wafers and solar modules that extract more of the sun's energy - in excess of 17 per cent - than the current industry standard.

Mr Thorsen rejected criticism that the energy used to manufacture solar panels is worth more than the energy the panels save.

The energy payback period has improved to under two years with today's production methods and will halve to one year with REC's new technologies, he said.