New building norms can drive BIPV mainstream, with 6.6 GW market in 2021

Building-integrated photovoltaics (BIPV) have remained a niche technology due to high costs and stringent specification requirements. Nor has their adoption been helped by the slow emergence past the developmental stage of thin-film solar modules – the best suited PV candidate for replacing traditional building materials.

As this week’s graphic shows, however, BIPV may yet enter the mainstream. Recent analysis by Lux Research projects a scenario in which BIPV sees a 1.2 GW global market by 2016, equivalent to $6 billion per current estimates, with a 69% share for Europe.

Currently, the European Commission’s Net‐Zero Energy Buildings (NZEBs) standards continue to fuel widespread adoption across the continent, and are on track to give Europe a lion’s share of BIPV installations in 2016 – assuming, of course, that the Euro Zone sees continued macroeconomic stability.

Primarily driven by greater adoption of LEED buildings, BIPV installations in the U.S. will grow at a steady clip, albeit slower than the EU. Meanwhile, growth in Asia will be limited to showcase projects driven by government and corporate sustainability goals.

Given that the EU directives on NZEBs all have 2020 targets, it is further likely that BIPV’s inflection point will occur in the 2017-18 timeframe as 2020 NZEB targets loom over EU member countries. In this scenario, the divergence between Europe and the rest of the world grows even larger, with Europe accounting for over 85% of global BIPV installations at 6.6 GW.

Source: Lux Research report “Building Integrated Photovoltaics: Moving Beyond Showcase Projects.”

Steven Minnihan

Does China’s battery manufacturing capacity threaten your strategy in grid storage?

It may seem shocking that China, with large manufacturing capacity for relatively low-cost lead-acid and lithium-ion batteries, comprises only 1% of the global installed megawatts of emerging grid storage capacity according to the recently published Lux Research Grid Storage Tracker.* While the North American market has seen tremendous movement on a regulatory* front* for energy storage in the past months, grid storage remains in the pilot stage in China as the Chinese government focuses on electric vehicles.* Is China snubbing the grid storage market and, if so, what does that mean for clients looking towards the Chinese market?

The European, North American, Korean and Japanese markets offer much stronger bets than the Chinese markets for near-term growth of grid storage. Due to a mixture of domestic storage technology developers, relatively swift regulation and government spending, these markets will continue to overshadow China’s grid storage market in the immediate future. However, the tides can, and will shift with staggering speed when China makes its move. Today’s leading markets rely on regulation, market pricing and consumer demand, resulting in slow, steady market growth. Conversely, the Chinese market will see immediate and explosive growth once government and the State Grid Corporation decide to turn their attention to grid storage.

With a growing pool of domestic battery supply and tremendous government funding, the Chinese market can lead global production and consumption of grid storage technologies, just as the world has seen it do in the automotive and solar sectors. The message is clear: clients need to integrate themselves into China’s domestic battery supply chain in order to capitalize on this growth.

However, these regional dynamics offer a valuable insight for clients looking to sell products outside of China. Specifically, the grid storage market offers strong growth for lithium-ion and other storage technologies outside of China, while other existing markets for storage remain China-focused. Based on market conditions earlier in 2011, Lux forecast that electric bikes and heavy electric vehicles will dominate demand for lithium-ion, with the vast majority of demand and supply coming from China. Conversely, the grid storage market is growing today in North America, Europe, Japan and Korea, making these regions primary focal points for companies looking to generate revenues outside of China.

* Client registration required.

Brent Giles

Will O&G companies get the frack (water) out?

There has been an explosion of frack water treatment companies, especially in the Marcellus, where geography and water disposal challenges favor small-scale solutions. Companies like WaterTectonics*, NeoHydro*, Produced Water Solutions*, Latitude*, Watervap*, and Altela* have pinned their hopes on a robust fracking market despite soft gas prices and strong regulations that fall just short of banning the practice outright. So far, the market has developed well regionally, with notable bans in New York State and in France. But we’ve expected a shakeout in the number of companies in the space, and the technologies applied to it.

Enter GasFrac, a startup that uses hydrocarbons like propane instead of water to fracture the rock. Already deployed at one site in the Marcellus, the company’s technology promises performance superior to water fracking, as well as capabilities that would be impossible using water – namely, reduced fluid volumes and near-complete recovery of used fluid.

Reducing the volume of water used in fracking won’t shut down demand for technologies that treat and dispose of produced water. GasFrac may not even be competitive in regions that generate an excess of produced water for disposal. But it has the potential to replace water fracking in dry climates, where water supply is problematic. That includes sites in the Middle East and China. Plus, if accepted by regulators as a more environmentally friendly way to frack, it could carve major inroads into regions where water is the current method of choice. Clients considering investing in this space should watch GasFrac’s progress carefully.

* Client registration required.

Ross Kozarsky

Wind and aerospace lead demand for advanced composite materials

This week’s Graphic comes from Lux Research’s recent report forecasting market growth for advanced composites based on carbon fibers, carbon nanotubes, and graphene. All told, the combined market is on track to expand from $7.0 billion this year to $25.8 billion in 2020 – an average compound annual growth rate (CAGR) of 16%.

As illustrated, most future growth will be powered by wind turbine applications that, thanks to increasingly strict renewable energy standards and a shift towards larger offshore installations, are on track to supplant aerospace’s historic role as lead adopter. The report predicts wind energy applications will balloon from $2.5 billion in 2011 to $15.4 billion in 2020, a CAGR of 23%.

Even so, the market for aerospace composites will also gain altitude – largely on the wings of Boeing’s successful 787 Dreamliner. The aerospace industry’s willingness to pay a price premium to reduce weight gave it an early start as the leading adopter (and developer) of novel structural materials. Yet, as wind applications become the dominant driver of future growth, aerospace composites will still see a healthy average CAGR of 13% – rising from $2.1 billion in 2011 to $6.3 billion in 2020.

While slim industry margins and long development timelines have slowed the automotive industry’s adoption of advanced composites, it will see the second largest average industry CAGR at 17%. That aside, revenues will actually only grow from $519 million in 2011 to $2.1 billion in 2020.

Oil & gas will also see relatively slow growth due to the end market’s inherent conservatism and its happiness to “get by” on conventional steel. The market will see a modest 5% CAGR from $273 million in 2011 to $427 million in 2020. Lastly, while sporting goods consumers are willing to pay for higher performance, they do not represent a volume driver. Total market size for sporting goods will remain steady at around $1.5 billion throughout the decade.

Source: Lux Research report “Carbon Fiber and Beyond: The $26 Billion World of Advanced Composite.”

Unilever and Solazyme double down as “green” consumer spending wilts

California-based biotechnology firm Solazyme recently extended its commercial agreement with consumer care giant, Unilever. The two companies have been working together since 2009 to leverage Solazyme’s tailored algal oils* for use in Unilever’s soap and personal care products.*

Upon completion of the development agreement, the two parties will enter a multi-year supply agreement that calls for Solazyme to supply Unilever with commercial quantities of renewable oil. That will help Unilever further lay the groundwork for its Sustainable Living Plan, under which it aims to derive 100% of its agricultural raw materials from sustainable sources by 2020. The extension of the partnership between Solazyme and Unilever underscores* the convergence* of synthetic biology and the personal care industry.

Although some personal care manufacturers have successfully charged a premium for their products, most green product manufacturers have not fared as well. During the recession, green products have experienced a higher drop in sales compared to conventional products, suggesting that although consumers want to appease their eco-conscience, they aren’t willing to sacrifice performance or price. Despite the growing number of green formulations, they still represent a small percentage of the overall market. Most manufacturers are focusing instead on bio-based packaging to position themselves as environmentally conscious, even going as far as to absorb the premium themselves. The trend is also* evident* in the food and beverage industry, and more recently the telecommunications industry.* As the recession tightens consumer spending, bio-based products must offer increased performance to incentivize consumers to make the switch.

* Client registration required.

Cindy Koh

China National Biotechnology Group targeting a $2 billion IPO in Hong Kong

News of a potential listing of China National Biotechnology Group (CNBG) spread like wildfire early this month, fueled largely by its targeted opening valuation of $2 billion which, if successful, would represent the biggest IPO thus far by a Chinese medical company.

A subsidiary of state-owned China National Pharmaceutical Group (aka Sinopharm Group), the corporation plans to list on the Hong Kong Exchange (HKEx) during the first half of 2012. Its public launch follows in the footsteps of Sinopharm Holdings, another unit of the Group that had secured 8.7 billion HKD ($1.3 billion) for its IPO in September 2009. Given Sinopharm’s successful IPO and its subsequent thriving stock values, CNBG’s higher offering is less surprising.

CNBG is the country’s largest biotechnology company for vaccines and blood products and the world’s fourth largest vaccine manufacturer. Its sales revenue reached close to 4.2 billion RMB in 2009, returning 1.1 billion RMB in profits for the year. Additionally, it recently announced its leading role in an 863 project focused on developing key technologies and products related to vaccines. The project involves eight other organizations, and received a total state grant of 150 million RMB.

Viewed from from the technical, political, or social prospective, CNBG’s IPO target looks promising despite slight tumbles in the Hang Seng Index since April this year. While its decision to list on HKEx is natural given Sinopharm’s success, it may also indicate a strategy to grow in foreign markets. Compared to other capital-raising centers in mainland China – particularly Shanghai and Shenzhen – HKEx will allow CNBG to link with a bigger international audience while maintaining its roots with Chinese investors. Both Sinopharma Holdings and CNBG will look to grow through mergers and acquisitions, as well as through organic mechanisms. Considering their strong positioning, clients can examine possible cooperation means with the Group through joint ventures, direct investments, or strategic partnerships.

Pallavi Madakasira

High-efficiency x-Si module technologies warming up to take 24% of the market in 2015

Rising competition, diminishing subsidies and falling costs for silicon have put increasing pressure on manufacturers of crystalline silicon (x-Si) cells and modules to develop higher efficiency solar panels. Because higher efficiency panels produce more power, they reduce the cost of commodity materials – such as glass, aluminum and copper – on a perwatt ($/W) basis. Lux analysts found that a 1% improvement in absolute efficiency contributes to $0.05 to $0.08 savings per peak watt.

This week’s Graphic illustrates how Lux analysts expect four emerging technologies – back side junction, HIT (heterojunction with intrinsic thin layer), wrap through emitter, or selective emitter – will ramp up as manufacturers upgrade to higher efficiency cells. Among the highlights of their analysis:

  • Selective emitter (SE) technologies are poised for growth. Extensive academic research has established that SE can boost efficiencies for both monocrystalline and multicrystalline cell technologies, giving it a clear lead among cell manufacturers. Also, based on announcements from tier 1 cell and module manufacturers and the time associated with ramping new technologies, Lux analysts anticipate SE technologies will account for about 15% of the standard x-Si market in 2015.
  • Back side junction and HIT technologies will remain specialized technologies. While some companies such as Hyundai Heavy Industries are attempting to combine back side + HIT technologies, Lux analysts do not see many more companies pursuing these as their first choices due to higher associated processing costs, and the unavailability of turnkey off-the-shelf equipment to commercialize these solutions.

Source: Lux Research report “Traversing the Road to Higher Crystalline Silicon Efficiencies: Who Stands to Change the Game, and How it Will Play Out.”

Ross Kozarsky

Oak Ridge’s low-cost carbon fiber has a long road to automotive composite applications

During a recent visit to Oak Ridge National Laboratory (ORNL), we spoke with Cliff Eberle, Technology Development Manager of the lab’s Polymer Matrix Composites Division. Among the many topics we discussed was the launch* this year of ORNL’s Carbon Fiber Composites Consortium, which lists among its goals the development of carbon fiber for use in automotive applications. Key to this goal is the task of making carbon fiber cheaper. The Automotive Composites Consortium estimates that in order for the material to be a feasible solution for widespread automotive use its price needs to fall between $5/lb and $7/lb ($11/kg and $15.40/kg), about half of today’s selling price.

Production of the material involves a complex process. It begins with putting a carbon-fiber precursor – typically polyacrylonitrile (PAN), a derivative of petroleum, although rayon and pitch are occasionally used – through a series of mechanical, thermal, and chemical processes. According to Cliff, the PAN precursor contributes 43% of the final carbon fiber price, thus offering ample opportunity to reduce costs by utilizing alternative cheaper precursors. ORNL is currently exploring precursors composed of textile-grade PAN, polyolefins, and lignin.

Portuguese acrylic-fiber manufacturer FISIPE supplies ORNL’s textile-grade PAN, which is 30% cheaper than standard PAN. While the textile PAN’s quality would be insufficient for high-performance applications like aerospace, Cliff said that it has already surpassed its automotive mechanical performance targets of 250 ksi (1.72 GPa) tensile strength and 25 Msi (172 GPa) modulus. Its biggest drawback thus far, however, has been significant batch-to-batch variability in mechanical properties.

The second alternative precursor ORNL is researching is fibers based on polyolfefins, which are less expensive than PAN. What’s more, due to their higher carbon content – 86% for polyethylene vs. 68% for PAN – polyolefins offer a higher yield from precursor to fiber. Traditionally, the biggest hurdle encountered when using this precursor has been the required sulfonation step that requires several hours of processing time. But Cliff said ORNL has demonstrated its process can work in less than one hour at pilot scale. However, the Laboratory has yet to reach the required mechanical properties using this precursor.

While both PAN and polyolefins are petroleum derivatives, ORNL is also developing a carbon fiber synthesis process from a lignin-based precursor. This method has the potential to be the cheapest, as it is based on an inexpensive, plentiful, and renewable resource. But it is also the least far along in development. Lignin is a much more complex molecule than PAN or polyolefin, and there is no commercially available source – though ORNL believes that sufficiently pure lignin could be readily extracted from pulp mills and biorefineries.

Comparatively lower strength and modulus requirements for automotive applications have enabled ORNL to pursue cheaper precursors. But reducing raw material costs is just one piece of the puzzle for broader adoption of carbon-fiber reinforced plastic (CFRP). Manufacturing composite parts consists of several additional steps, including preforming, molding, curing, cooling, and then trimming before final assembly (see the report “Chasing Cars: Can Composites Catch Up to Steel?“)*. Cycle times vary widely, but even the quickest of processes require several minutes – orders of magnitude longer than those used for steel, as metal stamping takes just seconds. Additionally, most molding processes suffer from much higher variability than the stamping and forming processes used for steel. In order for CFRPs to be a viable option beyond niche high-performance and electric vehicles, these production throughput and consistency issues will also need to be addressed.

* Client registration required.

Kevin See

China’s crackdown on lead-acid batteries continues

Recent reports indicate that the Chinese government has followed through on its promise* to crack down on pollution stemming from lead-acid battery production and recycling. The sector has been blamed for multiple instances of lead poisoning across the country. In August, China had reportedly shuttered 583 entities involved with either lead-acid production, assembly, or recycling, and temporarily closed another 1,015 for inspection and upgrading. As a result, over 80% of China’s lead-acid production has gone inactive. Further, the clampdown hasn’t been limited to small producers: The government forced Johnson Controls’ Shanghai factory to temporarily close after reports* of elevated blood lead levels arose from neighboring towns.

China’s Ministry of Industry and Information Technology has proposed phasing out all plants producing/processing less than 30,000 tons of lead per year by 2013, and limiting the construction recycling plants to those with capacity to process over 50,000 tons per year. These developments will have a significant impact on China’s massive electric bike market, where lead acid is the battery of choice (see the report, “Small Batteries, Big Sales: The Unlikely Winners in the Electric Vehicle Market“)*.

The incredible number of permanent and temporary shutdown could streamline the complex and fragmented lead-acid battery market, and increase the cost of manufacturing as lead-acid producers and handlers quickly adjust to more stringent restrictions on manufacturing and recycling – or else disappear completely. Furthermore, it will accelerate the pace at which e-bikes transition over to Li-ion*, as aggressive expansion of Li-ion manufacturing around the globe makes the batteries more competitive on cost and benefits. As a result, those wishing to enter the e-bike market for lead acid may find a simpler, albeit more strict, environment, while those interested in the Li-ion chain have an opportunity to find a place in the market.

* Client registration required.

Ross Kozarsky

Oak Ridge’s low-cost carbon fiber has a long road to automotive composite applications

During a recent visit to Oak Ridge National Laboratory (ORNL), we spoke with Cliff Eberle, Technology Development Manager of the lab’s Polymer Matrix Composites Division. Among the many topics we discussed was the launch* this year of ORNL’s Carbon Fiber Composites Consortium, which lists among its goals the development of carbon fiber for use in automotive applications. Key to this goal is the task of making carbon fiber cheaper. The Automotive Composites Consortium estimates that in order for the material to be a feasible solution for widespread automotive use its price needs to fall between $5/lb and $7/lb ($11/kg and $15.40/kg), about half of today’s selling price.

Production of the material involves a complex process. It begins with putting a carbon-fiber precursor – typically polyacrylonitrile (PAN), a derivative of petroleum, although rayon and pitch are occasionally used – through a series of mechanical, thermal, and chemical processes. According to Cliff, the PAN precursor contributes 43% of the final carbon fiber price, thus offering ample opportunity to reduce costs by utilizing alternative cheaper precursors. ORNL is currently exploring precursors composed of textile-grade PAN, polyolefins, and lignin.

Portuguese acrylic-fiber manufacturer FISIPE supplies ORNL’s textile-grade PAN, which is 30% cheaper than standard PAN. While the textile PAN’s quality would be insufficient for high-performance applications like aerospace, Cliff said that it has already surpassed its automotive mechanical performance targets of 250 ksi (1.72 GPa) tensile strength and 25 Msi (172 GPa) modulus. Its biggest drawback thus far, however, has been significant batch-to-batch variability in mechanical properties.

The second alternative precursor ORNL is researching is fibers based on polyolfefins, which are less expensive than PAN. What’s more, due to their higher carbon content – 86% for polyethylene vs. 68% for PAN – polyolefins offer a higher yield from precursor to fiber. Traditionally, the biggest hurdle encountered when using this precursor has been the required sulfonation step that requires several hours of processing time. But Cliff said ORNL has demonstrated its process can work in less than one hour at pilot scale. However, the Laboratory has yet to reach the required mechanical properties using this precursor.

While both PAN and polyolefins are petroleum derivatives, ORNL is also developing a carbon fiber synthesis process from a lignin-based precursor. This method has the potential to be the cheapest, as it is based on an inexpensive, plentiful, and renewable resource. But it is also the least far along in development. Lignin is a much more complex molecule than PAN or polyolefin, and there is no commercially available source – though ORNL believes that sufficiently pure lignin could be readily extracted from pulp mills and biorefineries.

Comparatively lower strength and modulus requirements for automotive applications have enabled ORNL to pursue cheaper precursors. But reducing raw material costs is just one piece of the puzzle for broader adoption of carbon-fiber reinforced plastic (CFRP). Manufacturing composite parts consists of several additional steps, including preforming, molding, curing, cooling, and then trimming before final assembly (see the report “Chasing Cars: Can Composites Catch Up to Steel?“)*. Cycle times vary widely, but even the quickest of processes require several minutes – orders of magnitude longer than those used for steel, as metal stamping takes just seconds. Additionally, most molding processes suffer from much higher variability than the stamping and forming processes used for steel. In order for CFRPs to be a viable option beyond niche high-performance and electric vehicles, these production throughput and consistency issues will also need to be addressed.

* Client registration required.