17 February 2019
GCL-Poly will keep its focus on upstream polysilicon and wafer business while expanding investment in end-use PV power stations.
GCL-Poly will keep its focus on upstream polysilicon and wafer business while expanding investment in end-use PV power stations.

GCL-Poly says not interested in bidding for Suntech

By Julie Zhu in Xuzhou

GCL-Poly Energy Holdings Ltd. (03800.HK), the world’s largest polysilicon producer, said it has no plan to bid for troubled Chinese solar panel manufacturer Suntech Power Holdings Co. The company will instead focus on seeking growth from polysilicon and solar power stations in the coming years, a senior executive said.

“We will not tender a bid for Suntech, although the local government hopes to get us involved,” Lv Jinbiao {呂錦標}, vice president of GCL-Poly, told visiting Hong Kong reporters at a briefing in Xuzhou in Jiangsu province. “Suntech only has a capacity of 2 gigawatts (GW), while our wafer capacity amounts to 8 to 9 GW. Therefore, it does not make too much sense for us.”

“We have consulted with our major shareholders on the decision, and they agreed with us that we’d better focus on what we’re good at,” he added.

A consortium comprising GCL-Poly Energy and Wuxi Guolian, the investment arm of Suntech’s home city Wuxi, and Hong Kong-listed Shunfeng Photovoltaic have submitted bids to restructure Suntech’s almost US$2 billion debt, a local media report said earlier.

However, Lv said that GCL-Poly intends to keep its focus on upstream polysilicon and wafer business and expand investment in end-use PV power stations, while staying away from other sectors. “Polysilicon business is quite challenging, and it has the highest entry threshold in technology and capital.”

The company aims to adopt a new technology named fluidized bed reactor (FBR) to beef up its competitiveness in producing polysilicon, the raw material for making solar panel.

“FBR technology would be able to help slash our production cost by half and reduce power consumption by one third,” Lv said. The company’s current production cost is around US$17-18 per kilogram.

GCL-Poly plans to officially kick off the production line using the new technology, with the facility to have an annual output of 6,000 metric tons. It has already completed test production on the line last year.

The new line would entail investment of around 1.2 billion yuan (US$195.76 million) for the company, Lv said. The new technology will help the firm cement its leading position in the market. GCL-Poly, with an annual polysilicon output of 65,000 metric tons, has already secured 20 percent of global market share.

PV power station

Apart from polysilicon business, PV power station is another key driver for GCL-Poly’s growth in the years ahead. The company will apply an “investment” approach in power station business.

“Unlike traditional power stations, PV power station is one-off investment, and requires very limited maintenance costs. Once you secure the power tariff from power grid, you have a very steady investment return,” Lv said.

“PV power station will help drive demand for polysilicon. And we would construct more projects in mature markets like US,” he added.

GCL-Poly has sold 349 MW (megawatts) power station projects in US and has reserves ground and roof power station projects of more than 1GW. The company has built a 20 MW PV power station in Xuzhou, and completed construction of a 10 MW power station in remote Tibet.

The Chinese firm has secured fixed power tariff of 2.15 yuan for its Xuzhou power station, which has an annual generating capacity of 24 million KWH (kilowatt hour), equivalent to coal consumption of 7,500 metric tons. GCL-Poly expects to collect back its total investment of 420 million yuan in the Xuzhou power plant within a decade.

The government has rolled out a set of incentives to encourage solar power generation. PV power stations will get a rebate of 50 percent of their value-added-tax. Also, the National Development and Reform Commission announced in August a 0.42 yuan subsidy for every kilowatt-hour of electricity produced by distributed photovoltaic power units.

– Contact the reporter at [email protected]


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