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Report from Solar Power International: Abu Dhabi-backed Masdar hopes to become a source of solar PV
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The solar photovoltaic space has attracted increased investment from several deep-pocketed technology firms--Intel, IBM, Bosch, Hewlett-Packard, GE--over the past year. But none of them has the carbon-based pools of cash that the Masdar Initiative boasts, courtesy of its connection to the Abu Dhabi Future Energy Co., a unit of the Mubadala Development Co., which is wholly owned by--you guessed it--the United Arab Emirate of Abu Dhabi.
The AD government said in January that it plans to pour $15 billion into Masdar (which means "the source" in Arabic), a mere drop in the bucket of the emirate investment authority's $875 billion "sovereign wealth" fund, the largest of its kind on the planet.
Steve Geiger, director of the Masdar Initiative's PV industries unit, briefed me at Solar Power International in San Diego about the Abu Dhabian plan to "channel its oil wealth into the renewables space." There are "five pieces to the puzzle" of the Masdar Initiative, he explained.
One of the puzzle pieces is the industries unit, Geiger's domain, but more on that later on. The other four segments include:
A new nonprofit institute of science and technology, being built in the emirate in conjunction with Geiger's alma mater, the Massachusetts Institute of Technology, will focus on graduate-level renewable technology program and research.
What Geiger called a "utility asset management unit," which will be involved in cleantech funds and be looking at smaller, targed investments.
A carbon management group focused on technologies that could capture carbon dioxide by injecting the global-warming agent into oil wells.
Finally, the piece de resistance, the Masdar Green City project, a new 640-hectare zero-carbon/zero-waste burg located near Abu Dhabi's international airport. Once completed, Masdar will be the first all-renewable-powered city and will also be the home of the above-mentioned research institute. A 40-MW PV power plant under construction will offer the main source of electrical juice for the emerald city.
The aforementioned industries unit has already made a large splash on the PV scene with its $2 billion deal with Applied Materials to build amorphous-silicon thin-film fabs in Germany and the emirate itself. The unit has made and will continue to make investments in local and global PV and other green-power production capacity and develop a portfolio of assets, both directly and as equity or venture plays in monocrystalline-silicon, thin-film, concentrating PV, and thermal solar companies.
Construction on the first Masdar manufacturing site, located near Erfurt, Germany, began in August. Geiger said the "foundation has been laid and the building is going up," with the first delivery of Applied SunFab TFPV production tools expected in the first week of March. The 70-MW line should take about 3-6 months to ramp, with first product out in the fall of next year.
A second plant, built in Abu Dhabi, is on a schedule "staggered about 6 months later" than the German mothership factory, Geiger explained. Once completed, the emirate will boast a 140-MW a-Si TFPV factory of its own, moving closer to the initiative's goals of becoming a leader in the renewables/alternative energy space and diversifying the local economy though the creation of new industries and jobs.
But Masdar's plan is much grander than fabricating big-glass PV slabs. Geiger told me of plans to build a huge electronic-grade polysilicon plant in Abu Dhabi (but not on account of those plentiful Arabian peninsular sands--wrong kind of the silica stuff, according to him).
The idea is to build a low-cost, partially vertical infrastructure that goes as far as cell-making--polysi, wafer, cell--then "ship cells to the world." The nationalized company hopes to reach 400 MW in capacity by 2010, then double that to 800 MW by 2012. An initial poly deal should be done "within 3 to 6 months," he said. Plans are in the works to colocate all the PV materials suppliers--from gas to glass--on the Abu Dhabi manufacturing site.
In addition to the hundreds of millions of dollars being invested in the a-Si TFPV, Masdar has also put monies in another potentially tasty thin-film flavor--copper indium gallium (di)selenide. Three CIGS companies--HelioVolt, Solyndra, and Sulfurcell--have all benefited from the cash largesse of the Abu Dhabian green machine. As for that other TFPV plat du jour, cadmium telluride, Geiger said that Masdar was advised to "keep out of that space, since you can't catch up with First Solar." (I guess the other CdTe players didn't get that memo.)
The Masdarites are "strong believers" in concentrating PV, according to Geiger, no surprise given the 360 days of annual sunshine in the country. The group plans to make a "substantial CPV play" in the next 3 to 6 months.
He sees three distinct sectors for the three types of PV, none of which competes head on with the other: residential, dominated by crystalline silicon products; commercial, which features a mix of cSi and thin film; and utility, which will be part thin film, part CPV. Masdar will make a strong play in each, he explained, via acquisition, joint ventures, start-ups and organic build-outs, and the like.
In the end, Abu Dhabi wants to reduce dependency on outside technologies and become a primary developer and exporter of solar PV, especially to the neighboring countries in its own region (defined as stretching from Morocco and northwest Africa across the top of the Maghrebi zone through the Arab lands and Iran to India).
In the drive to grid parity, Masdar "wants to consolidate the PV industry chain" though vertical integration. Eventually, the initiative unit plans to climb even farther up said chain to system installation. Geiger sees the need to "cut out the middle man, so that margins can be compressed even more and a lower cost per kilowatt-hour can be produced." He believes system integrator companies like SunEdison's "days are numbered," once this "cell to socket" approach takes hold.
Geiger said that Masdar hopes to evaluate all the technologies out there "to see what works" and to eventually become a broad industrial player in PV and other renewables and sustainables, much like GE. He believes other countries will start to follow in Abu Dhabi's trailblazing footsteps and adopt the nationalized/sovereign invesment approach.
But when he quipped that the company would like to become "the Exxon Mobil of solar," I shot back with "but hopefully not the Exxon Valdez of solar." He smiled at my free-associational remark, which I meant as a humorous jab after an interview filled with the kind of cocksure confidence instilled by megabillions of dollars in the bank and very smart people figuring out how to invest it.
Masdar may turn out to be one of the major players in the photovoltaics revolution, creating a game-changing model for other countries with enough cash to jump into the fray. But it wouldn't hurt for the Abu Dhabian team to learn a little humility in case they run aground on the shoals of unforeseen difficulties and unintended consequences.
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