Industry & Suppliers Photo: Manz AG Photo:

Manz CEO Dieter Manz with representatives from Shenhua and Electric at the 350 MW CIGS supply deal on January 23.

China embraces thin film

Thin film technology: Chinese state-owned companies are purchasing thin film equipment from European suppliers in a move that may shake up solar manufacturing. For the PV technology companies, the move could not have come too soon, but how will the Chinese state-owned coal, electric and building giants succeed where others have failed?

It had been a long time coming, and it are not only focusing on pushing up the of Manz in the course of a cash capital may be the making of a man. On Janu- last couple of percent [of conversion effi- increase and became anchor investor of ary 23, Dieter Manz signed a 350 MW ciency with its CIGS technology] but also the German equipment maker. Dieter CIGS turnkey supply contract with Chi- on cost. In the end, we talk about cost per Manz agrees that the investment was nese coal giant Shenhua Group and Manz watt, but mostly about cost per kilowatt crucial in allowing his company to con- anchor investor Shanghai Electric. The hour. [For Shenhua] it is about LCOE.” tinue to pursue its CIGS program. But it €263 million deal was almost a year in This focus is not new to PV, and many was also essential in realizing the Shen- the making. In one fell swoop, the resul- companies have repeated the claim to be hua equipment deal. tant revenues will surpass the epony- LCOE-focused in recent years, manufac- “Shenhua and Shanghai Electric mous company’s full-year result across turers and developers alike. What’s new already have a longstanding business all business units for 2016. It will also is the scale of ambition, and there is lit- relationship,” Manz explains. “From the see Manz’s solar business unit become tle doubt scale is on the side of the par- finance side it was important [the invest- the top performing revenue generator in ties to the deal. ment in Manz from Shanghai Electric] 2017, for the first time since 2008. And it’s but also regarding access to high-level the economics of power generation itself Shanghai Electric’s role management with the large state-owned that underpins everything. Manz signed the contract with Shenhua companies.” For a German solar pro- “The ultimate target is to make solar alongside Shanghai Electric, a Chinese duction equipment supplier, Manz says, competitive with coal,” explains an ebul- state-owned power generation and elec- it would be almost impossible to access lient Dieter Manz, the German equip- trical infrastructure company. Shanghai senior decision makers without having ment maker’s Founder and CEO, when Electric and Manz entered into a strategic already established relationships with discussing the development and the partnership in May 2016, when Shanghai such a large company, whether Chinese three involved parties’ motivations. “We Electric took over a 19.6% of the shares state-owned or not.

46 03 / 2017 | www.pv-magazine.com Industry & Suppliers

ple. The new R&D venture is valued at €166 million. “The R&D JV will be by far the big-

Photo: Manz AG Photo: gest R&D organization in CIGS or even in thin film,” says Dieter Manz. “It shows the intention of both Shanghai Electric and the Shenhua Group.” In the short term and given this level of investment, Manz says that it is realistic that CIGS module efficiencies of around 16% – 17% in mass production can be achieved. The larger commercial-scale Chongq- ing production facility will be operated by a second JV subsidiary of Shenhua and Shanghai Electric, in which the latter will take a 20% stake. On the opex side, Shen- hua is looking to reduce material costs The CIGSfab concept has been costly for Manz to maintain, before a sale came through. Manz will by leveraging its purchasing power with retain the license to sell future lines both globally and under JV in . glass suppliers and is even ramping up activities in gallium and indium mining, Pathway to increased A number of joint venture (JV) sub- two of the rare earth metals in the CIGS competitiveness sidiary companies have been formed to semiconductor stack. Manz will deliver two of its CIGSfab lines drive the development of CIGS in China. Power is also a key opex cost lever, and to Shenhua by the end of 2019. One will be The first, the R&D JV, has purchased the with Shenhua operating some 80 GW of a 306 MW fully-fledged production line 44 MW line, along with Manz’s generating capacity in China, 70 GW or in Chongqing, the second a 44 MW R&D CIGS Innovation Line, officially Manz so of that being coal-fired, Manz says that line, in Beijing. CIGS Technology GmbH, in Schwäbisch it will be able to access cheap electricity. However, the equipment supply con- Hall – the former Würth Solar produc- Reductions in capex too are in the tract is far from a straightforward sale. tion facilities. Manz AG has taken a 15% sights of the Manz, Shanghai Electric, Manz explains that it is structured stake in the R&D JV and will receive and Shenhua partnership. It will look to in such a way as to provide sufficient €50 million from the JV company for the do so by localizing CIGS manufactur- resources to drive down the end prod- sale of the existing line in Schwäbisch ing equipment production in China, and uct’s cost and to drive efficiency sharply Hall. Shanghai Electric will own 20%. this too will be executed through the so- upwards. Remember, competition with Both R&D facilities, one in called equipment JV. coal on LCOE is the topline target, which and the new one in China, are currently The three companies have formed will require both dramatically cheaper recruiting staff, and Dieter Manz says the a subsidiary, with Manz taking a 56% and higher performing modules. R&D JV will employ around 300 peo- stake in the venture. While the produc-

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tion tooling for the initial combined boring Taiwan, does not have a good (AECEA) Frank Haugwitz believes that 350 MW worth of lines will be produced record. given the maturity of the crystalline sili- at existing Manz facilities in Germany, con production sector in China, for new Slovakia, and Taiwan, the aim is for the Cautionary tale market entrants thin film offers a point bulk of the equipment for future expan- There is little need to go into details as to of differentiation. sions in China to be produced at Manz’s thin film aspirant Hanergy’s woes given “The Chinese government also wishes local Chinese production site. pv magazine’s past voluminous cover- to see a greater competition among exist- “We have agreed to go step by step age, and there is some regret from within ing technologies,” says Haugwitz. “Last along the localization strategy,” says parts of the PV sector that promising but not least, is China’s ability to scale up Manz. “The licensing is structured such approaches to the technology, like flexible production – something that is hardly that the sale of CIGSfabs in China will be module producer from Silicon seen anywhere in Europe nowadays – so exclusively executed by the equipment JV. Valley, appear stalled. Trading in parent that technology suppliers can grow along Orders from other parts of the world will Hanergy Thin Film’s stocks on the Hong with their Chinese partners.” be by Manz AG.” Kong Stock Exchange have remained Haugwitz says that given these factors, Given this three-pronged approach to indefinitely suspended since May 2015, there is a window of opportunity open increasing CIGS technology’s competi- after the company’s stock price collapsed, to European equipment makers to supply tiveness with established crystalline sili- losing some $19 billion in 24 minutes – aspirant thin film producers, although con players in China, Manz believes there like the metaphoric house of cards. for how long it will last is difficult to say. is a good chance that its thin film mod- Semiconductor giant TSMC also had The Beijing-based Haugwitz adds that ules will be able to compete with multi- no success in moving into solar via CIGS, given Chinese manufacturers’ ability to crystalline shortly, an opinion to which with GW plans having never eventuated scale and drive down costs, European U.S. CdTe giant First Solar also appar- and its 100 MW production line, sup- technology providers should view it as a ently subscribes. plied by South Korea’s Avaco, laboring “win-win partnership.” Manz expects that 350 MW is just under low yield rates and an uncompeti- It is notable that two state-owned enter- the beginning of Shenhua’s aspirations tive cost structure. TSMC exited solar in prises in Shanghai Electric, as an electric- for CIGS and that further orders may August 2015, having attempted to make ity generation and distribution provider, eventuate even before the first com- solar thin film production work since and Shenhua, China’s largest coal genera- mercial line is shipped and fully opera- 2009 and despite having achieved 16.5% tor and the world’s biggest coal miner, are tional. “The target is not only to stop with module efficiency. switching onto solar via thin film. 300 MW,” says Dieter Manz. “Shenhua Some smaller thin film operations in Solar PV manufacturing in China has went for CIGS because it sees the chance China have also sought to commercialize historically and until now been a private- to scale it more easily [than c-Si]. There is their technologies with limited success. sector business, with start-up operations less supply chain – only glass supply; the However, the Manz, Shanghai Electric, tapping Australian technology know- rest is really not high volumes: glass in, and Shenhua CIGS push is set against a how to assemble low-cost lines. Ven- module out.” At GW-scale, the CEO sug- backdrop that may change the complex- ture capital was often sourced from U.S. gests, that a co-located glass facility could ion of the endeavor this time around. investors before listing on the New York be on Shenhua’s future agenda. Stock Exchange. While this does sound promising, thin State intervention The state-owned enterprises looking film manufacturing in China, and neigh- Asia Europe Clean Energy Advisory’s to thin film today are doing so through Photo: Singulus Photo:

While Hanergy may have left a bad taste in the mouth of many industry players, its attempted expansion delivered demand to some European equipment suppliers, including Singulus.

48 03 / 2017 | www.pv-magazine.com Photo: Manz AG azine topv mag astatement in spokesperson aSingulus state,” said Chinese of the year. of this April in shipped be to first the with built, being currently are machines The respectively. production of CIGS stages evaporation and tering, sput selenization, for the machines, nius Sele and Vistaris, Cisaris, of its delivery for the supply equipment deal, tothe ties product. BIPV stream amain it become of seeing aim the with Avancis’technology CIGS in investing is it structure, subsidiary a Through rials. mate of building supplier China’s biggest ambition. longer-term the of 3GWbeing ascale with duction, of pro MW 300 to around to expand ties facili two the is for The plan sites. at two of production CIGS MW (CNBM) for 150 Materials Building National China with adeal signed of suppliers equipment ber anum 2016 ahome. At SNEC, the ing find is PV film complex, thin industrial state-owned Chinese of the parts other In PVBuilding with sources. renewable alternative have tocomefrom will revenues, power, future that and sage mes unmistakable an sends ity, certainly 100 some GWof capac worth January, in 11 provinces across power plants fired of over 100 coal- construction the halted Administration Energy National China’s That motion. in wheels the set ment has govern the from push ever, clear the How marketplace. solar changing fast of the face the in businesses ate agile to cre looking structure, a subsidiary inChina. production The planisfor to Manz reduce thecapitalcosts ofproducing itsCIGSequipment, through localizing CNBM is a state-owned company and and company a state-owned is CNBM “We see that there is a clear objective objective aclear is there “We that see par one of the was Singulus Germany’s . “Large state-owned companies are are companies state-owned . “Large

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S Jonathan Gifford ------

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