Johann Harter: We will construct one of the largest PV power stations in the world
With smiling and intelligent Dr.Johann Harter, COO of Activ Solar, we spoke on polysilicon production, construction of solar parks and opportunities for integrated PV business in Ukraine.
Activ Solar announced plans to invest about $1 bln. in the PJSC Semiconductor Plant and the construction of solar power plants (SPPs) in Ukraine. $350 mln. have already been invested. How did you manage to attract this capital given the fact that investors lack interest in Ukraine? What is the approximate structure of these investments within the Activ Solar trust fund – short-term capital from tax havens, private funds, or corporate investments?
To date, Activ Solar has invested over EUR 300 million into the development and modernization of PJSC Semiconductor Plant. Our company has also invested significantly into the development of solar park projects in Southern Ukraine. Both of these business areas are highly capital-intensive. Our company has attracted this capital both in the form of equity and debt finance. Generally the debt employed is composed of project & structured finance from a mix of local, international financial institutions and export credit agencies such as Hermes, OeKB and Coface. As a significant portion of the equipment for Polysilicon production and solar parks is imported from outside Ukraine, ECA finance offers an attractive alternative to local finance. We actively looking for both debt and equity investors to fund our solar park pipeline and keep the positive momentum going. Today, the renewable energy industry is one of the most attractive industries in the world with high (above average) yearly growth rates, a clear technology roadmap and enormous potential.
When is the new production line of the PJSC Semiconductor Plant going to be officially commissioned?
Today at PJSC Semiconductor Plant, we have commissioned all work-streams and are in the process of ramping-up Polysilicon production to reach full-capacity in the near future. We plan to have an official opening ceremony in July 2011.
What will be the next stages of modernisation of the PJSC Semiconductor Plant and how much will they cost?
Activ Solar’s long-term goal is to build a fully integrated solar platform from the production of Polysilicon through to the supply of Modules used in solar photovoltaic installations. Today, we are fully focused on the optimization of Polysilicon production processes and the delivery of a premium product in the global market place. Activ Solar is currently on track with our plans to increase Polysilicon production capacities to 3,900 metric tons per annum by year end. Today we estimate that the total capacity of the factory can support up to13,400 MT of Polysilicon per annum with utilities already in place to support it (Nitrogen, Trichlorosilane, Hydrogen and Hydrochloric Acid production). In the coming months, our team will finalize a roadmap on the expansion of the factory to the 13,400 MT/year mark.
Can you provide more precise numbers on the actual and planned annual production capacity of the plant for TCS, Poly-Si and Mono-Si? What other products will be manufactured?
Trichlorosilane (HCl3Si)– 27,000 MT per annum. Polysilicon – 2,500 MT per annum and 3.900 MT by the end of 2011. Monosilicon – ~20 MT per annum using old equipment, plan to expand to ~400MT per annum. The factory also produces Silicon tetrachloride (SiCl4), Hydrogen, Nitrogen and Hydrochloric Acid.
Activ Solar has reached now full upstream integration, producing high-quality Poly-Si ingots. However, the strategic goal is to create a vertically integrated business. From your opinion, when can this be achieved?
The timing of our main strategic goal – to create a fully integrated company – will only depend on the global solar market and on our ability to develop a unique, trendsetting technology in the downstream segment of the solar PV value chain. There is no point to invest in yesterday’s technology. Our company actively invests in research and development to identify tomorrow’s technology which will enable us to be at the cutting edge in the future.
While constructing SPPs you are using solar panels from Asian manufacturers. What is the company’s position towards local content requirement for Ukrainian goods and services to be introduced in 2012?
We support the local content requirements in Ukraine as required in other countries such as Canada, Turkey and China. This is the smart way to support innovation, the local renewable energy sector and to create as new jobs. The global renewable energy sector is very young and we believe Ukraine offers great potential in its development both as a platform and as a source for technical and engineering talent. Activ Solar has implemented a roadmap to meet the upcoming local content requirements. For example, today we already build new solar parks using Ukrainian-made components for key equipment including mounting systems, inverters, and construction materials. We also employ Ukrainian engineers and construction specialists. Not to mention that Activ Solar also launched a full-scale Polysilicon production in Zaporozhye.
There is information that Activ Solar has entered a $200 mln deal with Hyundai to purchase their solar panels? What do you think of Hyundai products in terms of price and quality?
Our company is not new to solar industry and we are in contact with all major global suppliers in our sector. Activ Solar has a policy not to comment on specific suppliers, business partners or customers.
Do you think the FiT-scheme is successful in Ukraine? What can be improved?
Green Tariff in Ukraine is a great achievement and a major step towards developing the renewable energy sector in the country. This is the only way for countries with limited natural resources like Ukraine, Spain, Germany, Italy, Japan or South Korea to grow and develop.
The greatest support to realize such projects would be loan guarantees and rebates or subsidies for production would also help to stimulate more activity in this sector.
What are the most important lessons learned from the Rodnikovoye project – land, licensing, grid connection?
The Rodnikovoye project was a major success for our company. The project took almost one year for the full planning, execution and completion. It was one of the first projects of this kind in Ukraine. All participants have developed now a thorough understanding of the permission process, timing and documents to be provided, among others.
Activ Solar is now constructing a larger SPP in Okhotnikovo on a turnkey basis. Can you say who the buyer is? Is it true that this SPP will generate enough electricity for the whole nearby town of Saky?
The buyer of solar electricity will be the Energorynok. Ukraine has a regulation stating that all energy producers from any source (nuclear, coal, hydro, wind, solar) can sell electricity only to the Wholesale energy market.
The Okhotnikovo project will be developed in several stages. Recently we finalized the construction of the first stage of the project – 20 MW Omao Solar. The first phase of the Okhotnikovo project will generate approximately 25 000 megawatt hours of green energy per annum, enough to meet the electricity needs of 5 000 households.
The total size of the Okhotnikovo project will be disclosed as subsequent phases come online. We are confident that after the completed power station will be one of the largest in the world.
In terms of SPP construction, do you plan to enter other markets in the region?
Activ Solar is constantly looking for opportunities in new markets. Our goal is to use the knowledge and experience that we have gained in Ukraine and apply it to other emerging solar markets. There are no concrete projects outside the Ukraine at the moment.
How is Activ Solar dealing with the lack of local specialists: engineers, construction workers, project managers? What are your estimates on the number of jobs that the solar energy market can generate in the next 5 years (globally and in Ukraine)?
Ukraine has a long-standing history of Polysilicon and Monosilicon production. The country has a lot of talented engineers and project managers. Some of them lack the experience using advanced tools, modern equipment and construction of solar parks, but this can be solved quickly as we have experienced. Activ Solar runs a training and specialization programme with the National Academy of Nature Protection and Resort Development in Crimea. Together with the Academy of Sciences of Ukraine we do research in the areas of high Purity Polysilicon production for the solar and semiconductor industry. Furthermore, we run special programs with Vocational Technical School №23 and the Zaporozhye State Engineering Academy with focus on training and talent search.
Today, the solar industry employs approximately 130 000 people in Germany. Our company employs around 1 100 people in Zaporozhye alone.
The global solar market will grow. The industry is far from reaching its maturity and has shown a 30-40% growth per year for the last 10 years.
Tell us about the R&D joint venture with Diamond Aircraft Industries – how did it come about and what are its current activities? Has it yielded some results already?
The purpose of this joint venture is to develop new technologies for the production of solar modules. Our main focus is the development of highly efficient components and materials for new versatile and lightweight applications. We are still in the research phase, but we are very satisfied with the collaboration up to now and positive about the latest results.
The slogan of Activ Solar is “Producing an alternative future”. What is your vision of such future in Ukraine – say, in 5, 10 and 50 years?
5 years: a fully integrated PV company with a strong foothold in Ukraine amongst other developing solar markets – focus on high quality products with cost effective production.
10 years: amongst the top 10 solar companies in the market, strong R&D, developing and deploying cutting edge technology.
50 years: hard to predict in such a fast growing market and industry.
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In this issue: - What are the main obstacles for Russian investment projects in Europe; - What are the discussions on the Nord Stream 2 project and which positions do the parties stick to; - Which opportunities does successful passing of the most of the heating season give to Ukraine; - What have scandals in energy sector resulted in Ukraine; - How do expenditures on energy efficiency and subsidy programs correlate; - How does the issue of transparency in state owned enterprises get solved; - In which way did the government crisis impact energy sector; - How does the dialog with citizens on key reforms develop.