LONGi Reappears on CCTV Trading Hours for Deeply Analyzes the PV Industry
Time:2019-09-30 16:18:27
On September 21, Trading Hours column from the CCTV Financial Channel once again reported LONGi.
 
The program group went deep into the headquarters and production of LONGi, and conducted interviews with Zhong Baoshen, chairman of LONGi, and many experts in R&D and market. Taking LONGi as a model, it analyzes the development status of China's PV industry, looks forward to the development prospects, and expresses full confidence for the development of China's PV industry.
 
The cost of PV power generation continues to decrease;
the era of Grid Parity is coming soon
 
The PV industry chain includes five major components: silicon materials, silicon wafers, cells, and surface power stations. In the past 10 years, the cost of PV modules has dropped from about 40 yuan/W to less than 2 yuan/W with a drop of more than 90%.



▲ Slicing factory production line in LONGi Xi'an

If a piece of silicon wafer is made into a cell, it can emit about five degrees electricity a year. Compared to a decade ago, its efficiency of light energy has increased by 55%. Ten years ago, a small piece of silicon wafer cost 100 yuan, but now only 3 yuan.
Li Jie, director of silicon wafer R&D of LONGi Green Energy Technology Co., Ltd., told CCTV reporters that the capacity was only 0.5GW per year 10 years ago when he came to the factory. Now, its capacity has reached 5GW per year, ten times the level ten years ago. He realized that the cost reduction and efficiency increase are the key to the development of the PV industry in recent years.



▲ CCTV journalist in LONGi slicing factory to show LONGi silicon chip

The cost reduction refers to the cost reduction of all links in the whole industry chain, which can directly reduce the per-watt investment cost of the power station.
Efficiency increase refers to improving the cell efficiency through the improvement of the process, thereby improving the power of modules and indirectly reducing the per-watt investment cost of the power plant.



▲ Li Jie, director of silicon wafer R&D of LONGi, was interviewed by CCTV

Among the four links of silicon materials, silicon wafers, cells and modules, the cells and modules have the best prospects for efficiency increase and significant impact on downstream power plants. Taking the cells as an example, based on the 20% efficiency, it is estimated that the one-percent increase in efficiency can save about 5% cost for the downstream power stations.


▲ LONGi Hi-MO series high efficiency monocrystaline module products

The cost of PV power generation is rapidly declining due to the technological innovation. Industry insiders told reporters that at present, domestic PV companies have mastered the core process and equipment of the entire industry chain. The diamond wire slicing technology alone can save 30 billion yuan for the PV industry per year.


▲ Slicing factory slicing workshop in LONGi Xi'an

Due to technological advancement, the cost of PV power generation in Europe and other regions has approached or even lower than that of traditional energy generation, and the cost of PV power generation in China will continue to decrease in the future, eventually achieving grid parity or even low-cost grid.
 
Opportunities and challenges of PV enterprises
 
Through cost reduction and efficiency increase, the cost of PV power generation will continue to decline, and eventually be equivalent to or even lower than that of the traditional energy, which is the “grid parity” what the PV industry concerns most.
 
The reduction of subsidies in the PV industry has been the trend of the times. Since PV-related processes and technologies are becoming more mature, the parity projects have been implemented in some areas with low land costs and high availability hours.



▲ China's first large-scale grid parity ground power station

On December 29, 2018, China's first large-scale grid parity project for PV was officially grid- connected in Golmud, Qinghai. At present, the bidding price from 0.26 yuan / kWh to 0.28 yuan / kWh has existed in Inner Mongolia. It is understood that as the cost of power generation continues to decline, the grid parity for PV will gradually expand to a wider area.

In April this year, the National Energy Administration proposed the first batch of grid parity projects for wind power PV in which grid parity projects for PV power generation is 14.78GW, with about 4.8GW to be grid-connected this year. Since then, the era of PV grid parity has been officially opened.
 
In July this year, the National Energy Administration issued a notice on the Publication of the Results of the National Subsidy Bidding for 2019 PV Power Generation Projects, and announced that based on the principle of fairness and justice, 3,921 projects with the total installed capacity of 22.79GW in 22 provinces (autonomous regions and municipalities) such as Beijing and Tianjin have been included in the 2019 national bidding subsidy, initiating the first step of the marketization of China's PV industry.
 
After achieving the grid parity and no need for the government subsidies, the entire PV industry in China will usher in fully market-oriented opportunities. Less subsidies in the overseas markets is the same as the market-oriented practice. Therefore, as the cost of establishing PV stations becomes lower and lower, there is no need for subsidies in China, and the world will also enter the growth phase of demand explosion.



▲ LONGi Chairman Zhong Baoshen introduced the development of the PV industry to CCTV reporters

The current order is in explosive growth and the silicon wafers are in tight supply, under which workers are working overtime to meet customer needs. Our revenue in the first half of this year has increased by 41% compared with last year, though the price of this year has dropped significantly compared with the same period last year. Our supply for silicon wafers in the first half of the year has exceeded 100% over the same period last year.
—— Zhong Baoshen, Chairman of LONGi
 
Roof Power Generation is Popular
Broad Prospects for PV Industry
 
The development of the domestic PV industry has experienced glory and downturn. Today, the PV industry is becoming more mature. So, how about the development prospect of the industry? Where are new opportunities?



▲ Distributed PV power station project

The power consumption of Shenzhen Yantian Port Logistics Park reached 8 million kWh per year with an electric charge of more than 5.5 million yuan. The team led by Cai Shisheng from LONGi New Energy Business Unit utilized a 29,000-square-meter idle roof to run a distributed PV power generation project, which can generate 4 million kWh electricity and supply 40% of the electricity in the park.


▲ Cai Shisheng, general manager of LONGi new energy southern region was interviewed by CCTV

PV power generation varies according to the intensity of the sunlight. It works in the day when the electricity price of power supply bureau is relatively high. PV power generation plays a role of peak shaving and valley filling for the power supply bureau.
—— Cai Shisheng, General Manager of Southern Region of LONGi New Energy
 
Cai Shisheng told CCTV reporters that because of the rising cost of PV products, more and more industrial and commercial owners hope to invest in distributed PV power generation projects this year, truly achieving " self-sufficiency, left electricity for grid". Many owners have considered to reserve the space in the roof for the installation of PV power generation equipment in the construction.
 
China PV Industry Association predicts that under the assumption of 1,200 hours of power generation utilization, it is estimated that the average LCOE of PV surface power stations and distributed photovoltaic systems will be reduced to 0.4 yuan / kW and 0.35 yuan / kW by 2020, respectively.

From the perspective of industry development prospect, according to the report released by the National Renewable Energy Center, the total consumption of fossil energy in China will reach its peak in 2020 and will decline steadily before 2035. In the next decade, China will usher in a large-scale construction of PV and wind power, with a new installed capacity of about 80-160GW/year.