In the first three quarters, the national polysilicon output reached 1.11 million tons, up 87.9% year-on-year. Among them, the output of polysilicon in Inner Mongolia increased by 2.6 times compared with the same period last year, and that in Baotou increased by 3.42 times to 252,000 tons, ranking first in the country in terms of production capacity and output scale. According to statistics, the proposed production capacity of polysilicon in Baotou City is more than 700,000 tons , and with the production capacity already put into operation, the future production capacity of Baotou City is expected to exceed 1 million tons. In 2022, the national polysilicon production capacity is only 1.2 million tons . Is such a large-scale expansion a joy or a worry?
From 0 to 25%
In 2017, Inner Mongolia Tongwei High Purity Silicon Co., Ltd., a subsidiary of Tongwei Co., Ltd., settled in the Metal Processing Industrial Park of Kundulun District, Baotou City, with an annual output of 50,000 tons of polysilicon. The first phase of the project was put into operation in October of the following year, with an annual output of 25,000 tons of high purity silicon and a total investment of 4 billion yuan. This is the first polysilicon project in Baotou City. At this time, the photovoltaic industry in Baotou City is in the early stage of development. Astor and Jingao have just entered, and the industrial chain needs to be formed. After the first phase of Tongwei was put into operation in 2018, the capacity utilization rate has reached more than 100% in 2019, and the output has reached 33000 tons.
From 2021 to 2022, Xinte Energy, Xiexin, Hongyuan Green Energy, Daquan Energy and Dongfang Risheng also entered Baotou one after another. Xinte Energy invested 17 billion yuan to build 200000 tons of polysilicon projects, while Xiexin signed a contract to invest 30 billion yuan to build 300000 tons of granular silicon projects annually. Hongyuan Green Energy invested 11.8 billion yuan to build 100000 tons of polysilicon projects, Daqo Energy invested 24.25 billion yuan to build 200000 tons of polysilicon projects, and Dongfang Risheng announced an investment plan of 150000 tons of polysilicon of 13.5 billion yuan. Tongwei shares started construction of the second phase of 60000 tons project and signed 14 billion yuan of 200000 tons of polysilicon project. All of a sudden, domestic core silicon enterprises gathered in Baotou, and hundreds of billions of funds poured into Baotou polysilicon market, all of which were invested by private enterprises.
In 2022, a total of 180,000 tons of polysilicon were put into production in Baotou, with an annual output of 113,000 tons, accounting for 14% of the country's total. In the first three quarters of
2023, with the projects of Xiexin, Hongyuan Green Energy, Daquan Energy and other companies put into operation, polysilicon production accounted for 25% of the country's total.
Figure 1: Changes
in the output of polysilicon in Baotou City and its proportion in the whole country over the years Data source: Digital New Energy
Why can Baotou City become a hot spot for investment in polysilicon projects? The author believes that there are three main reasons:
(1) The PV market has great
demand potential, and the centralized power station is the main downstream consumer of the PV industry chain. The site selection of the power station project not only needs to consider the sufficient solar energy resources, but also occupies a large amount of land. The first-class solar energy resource areas in China are distributed in Ningxia, Qinghai, Gansu, Inner Mongolia and Xinjiang, and the second-class solar energy resource areas are basically located in the northern region, which is the main construction site of centralized power stations. The land cost involved in photovoltaic development in desert, Gobi, desert and other areas is relatively low, and Inner Mongolia has a natural advantage in this respect. According to the Sixth Monitoring Results of Desertification and Desertification Land in Inner Mongolia, desertification land accounts for 50% of the total area of Inner Mongolia, and desertification land accounts for 34% of the total area of Inner Mongolia. Photovoltaic power stations and desert control can also be combined with each other. Inner Mongolia proposes that "by 2030, the installed capacity of photovoltaic sand control will be 89 million kilowatts, the annual power generation will be 150 billion kilowatt-hours, and the area of photovoltaic sand control will be about 2.3 million mu". The installed capacity of sand control is 5.5 times that of the existing centralized power stations in Inner Mongolia. According to the "14th Five-Year" Electric Power Development Plan of Inner Mongolia Autonomous Region, during the "14th Five-Year" period, the installed capacity of photovoltaic power generation in Inner Mongolia is 45 GW, ranking first among the 31 provinces and cities in the province, and the photovoltaic market demand has great potential for growth. In addition to Baotou, Inner Mongolia Ordos, Hohhot and other cities are also actively laying out the photovoltaic industry.
(2) Close to the middle and lower reaches
of the industry chain Silicon materials are the upstream link of the photovoltaic industry chain. The location should be fully close to the layout of the middle and lower reaches of the industry chain. On the one hand, it can form a cooperative alliance with downstream customers, stabilize market channels, and reduce intermediate logistics costs. On the other hand, it is more conducive to the innovation and development of the industry chain and better cost reduction and efficiency enhancement. At present, Baotou has laid out a number of monocrystalline silicon, silicon wafer and component projects such as Shuangliang and Jingao, which provide customer resource conditions for the layout of silicon enterprises.
(3) Abundant thermal power resources provide low electricity price concessions
. The cost of polysilicon and industrial silicon accounts for a large proportion of the cost of energy, of which the cost of electricity in the production of polysilicon accounts for 30% -40%. The relatively lower electricity price will significantly enhance the competitiveness of silicon enterprises. Compared with Yunchuan and other hydropower provinces, thermal power is relatively stable. Inner Mongolia ranks second in the country in terms of raw coal production, rich in thermal power resources, and ranks first in the country in terms of thermal power generation in 2022, which provides enterprises with lower electricity prices. At present, polysilicon enterprises in Baotou City have obtained preferential electricity prices for strategic emerging industries in Inner Mongolia Autonomous Region, which is about 0.33 yuan per degree, relatively low in terms of the whole country.
According to the plan of Baotou City, in the next three to five years, Baotou City will build a trillion-level photovoltaic industry cluster, a 100-billion-level semiconductor industry cluster and an organic silicon industry cluster, and become a global silicon industry development center, an advanced technology research and development center, and an application scenario demonstration center. This plan is ambitious, and the relevant supporting policies are conducive to supporting the development of silicon enterprises. Is
large-scale expansion a joy or a worry? Since the beginning of
this year, the price of polysilicon has continued to fall. In November, the price of polysilicon dense material was 64,000 yuan/ton, a sharp drop of 79% compared with the same period last year. The rapid decline in prices reflects the dramatic changes in market supply and demand. Although the national output of PV modules increased by 71.6% from January to September, the number of module exports shrank. More than 50% of domestic components are exported overseas, and changes in overseas markets have a greater impact on domestic component manufacturers. Among them, Europe is the largest export market of PV modules in China, with the export volume accounting for about 50%. Europe is currently facing the problem of module inventory backlog. It is expected that the new installed capacity will gradually stabilize after the rapid growth in 2024, while the overseas local module production capacity will further expand, which will gradually increase the pressure on China's PV module export market.
Figure 2: Price Trend
of Polysilicon Dense Materials Data Source: Digital New Energy
Therefore, the current PV industry should carefully assess the growth rate of domestic demand. This year, the strong growth of new photovoltaic installed capacity or partial overdraft of the demand for photovoltaic installed capacity in the next 1-2 years will bring greater challenges of overcapacity. Recently, some areas in Hunan, Shaanxi and other provinces have suspended the filing of distributed photovoltaic power generation projects due to excessive carrying capacity, and the progress of distributed photovoltaic installed capacity has been partially hindered. In terms of module production capacity, according to the expansion plan of enterprises, TOP10 module production capacity is expected to exceed 700GW in 2023, an increase of 80% over 2022, and the national module production capacity may approach 900GW. Next year, the utilization rate of industry capacity is expected to decline, and the problem of overcapacity will further increase.
Figure 3: PV Module Capacity Trend
Data Source: Digital New Energy
浙公网安备33010802003254号