Published on August 28th, 2012 | by Andrew1
China’s Largest Solar Power Farm Approved — To Be Built By GCL-Poly Energy, World’s Largest PV Polysilicon Producer
August 28th, 2012 by Andrew
China’s GCL-Poly Energy Holdings Ltd., the world’s largest producer of the polysilicon used in the manufacture of solar photovoltaic (PV) cells and panels, gained approval from the National Energy Bureau to begin work on a 310-MW ground-mounted and a 30-MW rooftop solar power project in the prefectural city of Datong.
Approval of the projects is the strongest demonstration of government support for the Chinese solar energy industry since the worsening of the European debt crisis and the US imposition of anti-dumping and anti-subsidy duties on Chinese imports, GCL-Poly Energy stated in a press release. The approvals also represent a milestone in government support for the construction of large, utility-scale solar power projects in China, GCL-Poly Energy says.
Government Support for Solar Power Projects
As part of China’s 12th Five-Year Plan, the Ministry of Industry and Information Technology announced the goal of reducing the cost of solar power to 0.8 yuan (12 US cents) per kilowatt-hour (kWh) by 2015 and 0.6 yuan (9 cents) by 2020. The new Five-Year Plan also calls for Chinese manufacturers to significantly increase production of solar PV panels in order to reach 5 gigawatts (5 GW) by 2015, while polysilicon producers will increase their annual production capacity to 50,000 tons.
Direct and indirect government support for China’s solar PV industry participants has been the central element enabling Chinese silicon and solar PV manufacturers to become the world’s leading providers. Rapid expansion of production has also led to oversupply and a precipitous decline in the price of solar cells and modules worldwide. Chinese solar PV producers took on huge amounts of bank debt, as well as raising equity, in order to finance expansion. As recent financial results show, that’s put them in fragile financial condition.
Some 95% of Chinese silicon PV cell and panel production has been bound for overseas markets. That’s prompted competitors in other WTO members, including the US and, more recently, the EU, to file WTO international trade petitions seeking redress from alleged illegal subsidies and dumping of product in their markets. A shift in government policy and support toward redirecting Chinese output of solar PV cells and modules to the domestic market would alleviate global market oversupply, as well as help defuse trade and currency management tensions.
GCL-Poly’s Downstream Expansion
Taken together, the Datong Shanxi solar power projects will be the largest solar farm in China, and one of the largest in the world. “It is a great honor for GCL-Poly to receive the approval on the construction of such large scaled solar farm projects,” company chairman Zhu Gongshan stated.
“This shows that the National Energy Bureau has strong confidence and trust in GCL-Poly’s capability to develop solar farm projects. It also demonstrates the Chinese government’s strong determination to support domestic solar industry.”
GCL-Poly’s rise to becoming the largest producer of solar-grade polysilicon has been exceptional in speed. Having achieved the capability of producing electronic-grade silicon in 2010, the group rapidly scaled up production capacity, which reached 65,000 metric tons by year-end 2011, according to the company. Concurrently, GCL-Poly scaled up its silicon PV wafer fabrication capacity, which reached 8 GW as of the end of 2011.
Management is now focusing on finding outlets for its products. These efforts entail GCL-Poly becoming a “one-stop shop” capable of providing solar power farm developers and investors with a full range of products and services spanning project development, engineering, procurement, construction, and financing on through to operations and management.
With the Datong Shanxi solar PV farms, GCL-Poly shows that it’s also ready, willing, and able to make direct investments and take ownership of large-scale solar power projects.
GCL-Poly management has been raising capital to finance such efforts. In late May, the company announced it had signed a ¥5 billion ($787 million) credit facility and strategic cooperative agreement with China Everbright Bank’s Suzhou Branch. The credit facility and other sources of working and long-term capital made available per the terms of the cooperative agreement “will be used mainly to support the sustainable and high-efficiency development of GCL-Poly,” management stated.
Earlier that same week, GCL-Poly announced it will co-develop and construct solar farms with Winsun New Energy and Shunfeng Photovoltaic in Europe and other targeted regions the parties mutually agree upon. GCL-Poly is to supply the other two companies with a stable supply of silicon materials, wafers and system integration products.
Photo credit: GCL-Poly Energy Holdings Ltd.
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