Series report of key products and equipment of solar-thermal demonstration projects supply chain —-chapiter of reflector
The opening words
Since the announcement of the list of China’s first solar-thermal demonstration projects in September of last year, nearly six months have passed. Many projects (mainly the projects in which the state-owned enterprise is the investment subject ) have carried out the work of EPC total package and bidding, purchasing of certain main equipment in the recent period to lay a solid foundation for the projects to enter the the substantive constructive stage in April. At the same time, Project owners using their private investment in projects such as SUPCON SOLAR, Shouhang Resources Saving, Tianjin Binhai CSP, who are the EPC of their own project, have started the procurement of key equipment such as reflector and collector tube.
It is expected that after the conformation of more demonstration projects’ EPC, with the advance of construction of these projects, the procurement of products and equipment will be carried out on a large scale.
Solar-thermal power plant has an extremely complex system and needs a wide range of procurement. Some of the key equipment needs a huge purchase. For the equipment suppliers, the market demand released by these demonstration projects is not only an opportunity, but also a challenge.
The first demonstration project will bring the first shuffle of China’s solar-thermal power industry chain and of course, well-prepared suppliers are planning the layout. Through the expansion of production, early stocking and other active measures, they want to grab more markets ” cake ” and to avoid being washed to the edge of the market .
To help clarify the status of key products and equipment in the supply chain and to provide a reference for large-scale procurement of upcoming demonstration projects, CSPPLAZA will do a series of reports on the hot topics of capacity, cost, supply capacity of a variety of key products and equipment of the supply chain.
The chapter of reflector
Reported from CSPPLAZA: Reflector is one of the most consumed core components in the solar-thermal power system , whose product performance and quality has a direct impact on the actual operation of the thermal power plant . reflector area is also full of the biggest competition in the domestic solar-thermal power market, because the amount of the manufacturers of reflector is huge，with the coexistence of the foreign brands like Flabeg FE and Rioglass and the rising domestic manufactures such as Chengdu Chande, Damin Glass,Taiwan-glass Yueda and Sunnpo Solar.
When to release the centralized purchasing needs
In accordance with the requirements of the relevant documents of the National Energy Board, the first demonstration projects should be completed and put into operation by the end of 2018 in principle. At this time node, when will the centralized purchasing demand for the reflector will be released?
Sunnpo Solar considers that the centralized purchasing time of the reflector is expected in March to April 2017, otherwise it seems impossible to install the mirror during the most suitable time for outdoor operation in the northwest region. Rioglass , the international mirror manufacturer, thinks that those demonstrate projects launched earlier have begun the process of procurement process since the beginning of March, and centralized procurement time is expected to appear in the second half of this year.
How will several major manufacturers of reflector perform?
In the large-scale centralized procurement needs, the performance of several major manufacturers can meet the overall needs of the demonstration project?
According to the acquaintance of CSPPLAZA reporter, the production capacity of the current major reflector manufacturers can be listed as follows:
Generally a 50MW power plant has the minimum demand of 500,000 square meters of mirrors and it can be calculated roughly that the total demand of reflectors for the construction of the first demonstration project will exceed 13.5 million square meters. In the ideal state, the production capacity of the manufacturers in the form can meet the demonstration projects’ procurement demand.
Does the price increase of about 20% have an influence on project investment estimates?
It is reported that since the second half of 2016, the prices of China’s commodity have continued to rise and metal, glass, cement and other materials and fuel prices have risen sharply. The price of float glass(one of the raw materials) has increased by about 20%, meanwhile, the price of silver nitrate and other raw material prices are rising too, which lead to the increase by 10%~20% of the reflector’s price.
This results in a higher cost of reflector manufacturing than before. According to preliminary calculations, the current market price of reflectors has been about 10% to 30% higher than the beginning of 2016.
Daming Glass expressed that with the growth of domestic market’s demand , once the production capacity is insufficient and the demand exceeds the supply, the cost of these standardizing products which need special customization will be further rise.
And Rioglass said that this situation will not affect the final purchase price too much for the proprietor. The market situation in recent years shows that the prices of reflector prices have has a large decrease. Even if the recent rise in raw material prices, prices are still expected to decline relative to the original offer , so there is not much impact on the overall budget of the proprietor.
FLABEG FE suggested that, based on the foreseeable annual demand, suppliers EPC and developers reached a long-term supply agreement to optimize cooperation between supply and demand sides. All participants can act and plan according to the long-term agreement and suppliers are also willing to invest in optimizing their production equipment, so that unforeseen fluctuations in raw material prices, such as silver, copper, crude oil and other price fluctuations can be offset or even get additional compensation.
Procurement time should be as soon as possible and orders should be placed by July.
Despite the different views on the impact of rising product prices and the best time to purchase (from April to July this year), all manufacturers almost unanimously pointed out that if the project is to be completed as scheduled, each EPC vendor or proprietor should start the purchase of the mirror as soon as possible, and the sooner the better.
The raw supply seems to be the biggest uncertain factor in the production of reflectors. Zhonghaiyang Chande suggested that as domestic customers’ demand for reflectivity is getting higher and higher, the raw manufacturers that can meet their demand are less and less. The raw manufacturers need to be determined according to the proprietor’s demand , but actually those that are able to provide high standards of raw are all foreign manufacturers, whose prices and payment conditions are higher. It recommends that proprietors assess the overall economy to meet the actual project requirements.
At the same time, Chande considers that because of the limit of the raw, the reflector manufacturers should stock as soon as possible in order to avoid delayed delivery cycle if the market demand is released concentratedly in the same period of time. The most secure shelf life of the mirror is about six months.
FLABEG FE said it can get these ultra-high performance materials in a short period of time. Even so, the sooner the plan is, the better the technical and commercial terms will be reached for all parties.
Daming Glass shares a similar view. It thinks due to the fact that the chemical raw materials (such as paint) required by the mirror manufacturing and the ultra-white glass of special quality are all not conventional products and the supplier’s choice is also very limited, and the supplier doesn’t produce all the year round , so arrangements of supplier’s production time should also be considered. If a production cycle is missed, suppliers may need to wait about 2 to 3 months time. this will also bring a lot of risk for the delivery of the mirror on time. Therefore, for the production of reflectors, it would be more advantageous and safer to determine the contract as soon as possible.
Daming Glass believes that order confirmation and contract signing of the reflector’s procurement must be completed by July 2017 , so the delivery time will began in September 2017 at the soonest. Plus the time to transport, it will be in October 2017 for the products to be delivered to scene, which is already the latest time for progress requirements to complete the project construction by 2018.