Singapore Rec
Transcript of Singapore Rec
Renewable Energy
Corporation
Wafers
Modules
Silicon Materials
Cells
Renewable Energy
CorporationSINGAPORE PRESS CONFERENCE
October 26, 2007
Wafers
ModulesCells
Silicon Materials
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SingaporePress
Conference Oct. 26, 2007
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Disclaimer
This Presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. These statements and this Presentation are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for REC ASA and REC ASA’s (including subsidiaries and affiliates) lines of business. These expectations, estimates and projections are generally identifiable by statements containing words such as ”expects”, ”believes”, ”estimates” or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for REC’s businesses, energy prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time in the Presentation. Although REC ASA believes that its expectations and the Presentation are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the Presentation. REC ASA is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the Presentation, and neither REC ASA nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use.This presentation was prepared for the Singapore press conference on October 26, 2007. Information contained within will not be updated. The following slides should be read and considered in connection with the information given orally during the presentation.The REC shares have not been registered under the U.S. Securities Act of 1933, as amended (the "Act"), and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Act.
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The world’s most integrated solar energy company
Cells Modules
Chemical process
Wafers
Casting and cutting
Silicon Materials
Surface treatment Assembly Installation and operation
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0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
(EJ/
Yea
r)
Oil Coal Gas Nuclear Hydro Bio Wind PV Solar - other Other
Solar energy opportunity
Declining stock of fossil fuels, climate changes and increasing competitiveness of PV systems will boost usage of solar energy over the next century
Source: solarwirtschaft.de
Unlimited renewable source of supply
Increasingly cost competitive
Decentralized power source
Peak power at peak time of usage
Environmentally friendly
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Capital cost & power lossPrice to customer
Cost
Gross marginCapital cost & power loss
Capital cost & power loss
CostCost Cost
Cost
Centralized versus distributed power generation
CustomerDistribution gridTransformerTransmission gridPower plant
PV systemsLocal cogenerationPV systems
WindGasHydroNuclearCoal
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Broad range of solar power applications
Residential buildings Commercial buildings PV power plants
Home systems Water pumping Telecom Space
Grid connected
Off grid
88 percent of market
12 percent of market
Market size and segmentation by applicationMWp
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2 000
2001 2002 2003 2004 2005 2006
On Grid Off Grid
Source: Marketbuzz, 2007
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Renewable Energy
Corporation REC GROUP
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REC has outpaced the industry’s explosive growth
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
4 500
5 000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Capacity expansions
Start production in ScanWafer
Start production in
ScanCell Start production in ScanModule
EstablishedSolar Grade
Silicon
AquiredASiMI
AquiredSiTech
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REC Group facts
Headquarters in OsloProduction facilities: 3 sites in Norway, 2 in the USA, 1 in Sweden1/3 JV ownership of EverQ in Germany
~1 650 employees~600 in REC Silicon
~600 in REC Wafer
~400 in REC Solar
~ 40 in REC Corporate
~900 employees in EverQ
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Unchanged production target, except within REC Silicon
Q3 2007
Production ~1 500 MT polysilicon 106 MW multi10 MW mono
12 MW cells9 MW modules
2007 versus 2006 +4 % +52 % +11 %
First nine months 2007
Production ~4 200 MT polysilicon 337 MW multi28 MW mono
35 MW cells31 MW modules
2007 versus 2006 - 1 % + 75 % + 40 %
Targets 2007
Production ~5 700 MT polysilicon ~465 MW multi~35 MW mono
~50 MW cells~45 MW modules
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REC Group - Financial highlightsRevenues (NOK million) EBITDA (NOK million) EBIT (NOK million)
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2005 367 474 755 8572006 872 1003 1139 13202007 1616 1673 1480
Q1 Q2 Q3 Q4
Growth: +85 % +67 % +30 % Growth: +129 % + 110 % + 23 % Growth: +147 % +124 % +17 %
0
100
200
300
400
500
600
700
800
900
1 000
2005 85 131 250 3642006 380 387 522 6762007 869 812 643
Q1 Q2 Q3 Q40
100
200
300
400
500
600
700
800
2005 53 88 185 2752006 298 303 422 5522007 737 679 495
Q1 Q2 Q3 Q4
Margin: 33 % - 4%p Margin: 43 % - 3%p
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Renewable Energy
Corporation WAFERS, CELLS AND MODULES
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Producing multicrystalline wafers with proprietary technology
Then cooled from the bottom; crystallization begins..
...and melted in special furnaces
Solar grade silicon is first put in crucibles…
...and multicrystallinesilicon is formed
The resulting massive ingot is cut into 16 blocks...
...each again sliced into leaf-thin wafers
Producing the thinnest wafers in Europe
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REC Wafer – Bringing market leadership further
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2006 2007e 2008e 2009e 2010e
SiTechGlomfjord extentionSWH III & IVAs is & under ramp-up
Additional 650 MW of new capacity from two new wafer plants under construction at Herøya, Norway110 MW of new capacity through extension of existing plant in Glomfjord, Norway275 MW mono wafer capacity in Glomfjord, Norway
Wafer production* (MW/year)
Wafer production capacity will exceed ~1 600 MW from 2010
* Efficiency assumptions: 15% multi and 20% mono
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Doping
Anti reflective coating
Soldering
Screen printing
Encapsulation and testing
Distribution
Wafer
Wet chemistry
From wafers to modules … and into the market
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REC Solar – Climbing up the ranks
180 MW of new cell capacity in NarvikAdditional 105 MW module capacity in Glava, SwedenFurther growth initiatives will focus on:
– Economies of scale
– Increased level of automation
– Proprietary technology development
JV, M&A, toll-production and outsourcing opportunities being evaluated
0
50
100
150
200
250
2005 2006 2007e 2008e 2009e 2010e
CellModule
Cell and module production (MW/year)
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Renewable Energy
CorporationMAIN FOCUS AREAS
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Main focus areas1. Cost competitiveness of PV electricity, slide 1 of 2
Source: REC, based on EC Vision Report 2005 (EPIA: Towards an Effective Industrial policy for PV (RWE Schott Solar))
900 hrs/year:~0.50 €/kWh
1990 2000 2010e 2020e 2030e 2040e
1.0
0.8
0.6
0.4
0.2
0.0
(€/k
Wh)
Photovoltaic Utility peak cost Bulk cost
1 800 hrs/year:~0.25 € /kWh
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REC 2010 cost road mapFigures in %
0 %
10 %
20 %
30 %
40 %
50 %
60 %
70 %
80 %
90 %
100 %
World Class2005
REC 2010Ambition
Polysilicon
Wafer
Cell
Module
Source: REC
Note 1: Cost structure as cost per watt of modules, based on world class production 2005
Note 2: Cost structure as cost per watt of modules, relative to 2005 level
1 2
REC Silicon targets ~60 percent reduction in polysilicon cost input– Main benefits will be derived from the
FBR-plant and lower consumption
REC Wafer targets ~50 percent reduction in wafer conversion cost– Achieved ~15 percent in 2006
– Further advanced technologies to be implemented in new production lines
REC Solar targets significant reduction in cell and module cost input– Achieved ~10 percent in cell and
~5 percent in module in 2006
– Further advanced technologies to be implemented in new production lines
Main focus areas1. Cost competitiveness of PV electricity, slide 2 of 2
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Main focus areas2. Technology development
RECWafer
RECSolar
Furnace technologyAutomated waferingprocessesThin wafers
State-of-the-art production technologiesHigh level of automation
RECSilicon
Silane technologyUnsurpassed polysiliconpurityNew polysilicon technology breakthrough (FBR)
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Putting safety firstLeveraging organizational capacity and effectiveness Infusing, retaining and developing talentEnhancing goal- and result-orientation at all levelsFocusing on strong leadership capabilityEmbracing diversity while Building a unified teamLiving our Values!
Main focus areas3. Organizational development
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Expansion projects – schedule on trackProject Capacity Investment 2007 2008 2009 2010
Moses Lake 6 500 ton (865 MW) USD 660m
Butte 1 000 ton (135 MW) USD 50m
Moses Lake/Butte 6 000 ton (800 MW) USD 485m
Herøya III 325 MW NOK 1 250m
Herøya IV 325 MW NOK 1 250m
Glomfjord (multi) 60 MW NOK 140m
Glomfjord (multi) 50 MW NOK 200m
Glomfjord (mono) 275 MW NOK 1 350m
Narvik 90 MW + 90 MW NOK 700m
Glava 55 MW SEK 110m
Glava 50 MW SEK 74m
Planning/Construction Ramp up Full production
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Renewable Energy
Corporation
SINGAPORE SELECTED FORNEW SOLAR SITE
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Comprehensive process towards selecting Singapore
A long process - of nine monthsScreening of more than 200 possible locations in 18 countries on 3 continentsDue diligence of almost 20 locations and Final negotiations with a handful of sites
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Singapore – Key rationale
Agreement signed with the Singaporean governmental agency Economic Development Board
– Located in Tuas View in West Singapore
– 30 minute drive from the centre of Singapore City
REC has finalized a comprehensive support package, including incentives and grants
– Tax
– R&D and process improvement
– Human resource recruitment and training
Singapore represents the ideal balance between financial return, risks and future opportunities
TuasView
Singapore
City Centre
1:350 00010 kilometer
Singapore
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REC activities in Singapore
Manufacturing – Solar wafers
– Solar cells
– Solar modules
R&D activities, incl.– Process innovation
– Factory automation
Solar value chain cost optimization processesIncorporates utilities, infrastructure and support facilities, as well as an on-site supplier park
Birds Eye View from South – West
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Worldscale integrated solar manufacturing complex
Street View from South – WestSite description– Possibly the world’s largest integrated solar
manufacturing complex
Complex will be integrated– Will be developed in stages
– Production capacity may reach 1.5 GW
– Value chain will not be balanced
– Investment could reach around EUR 3 billion over 5 years
– Total number of employees could be around 3 000 people
Pre-engineering has commenced– First investment decision will be taken
when pre-engineering is completed
Production expected to start no later than 2010
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Exciting careers in a future oriented industry
Great need for competencies– Engineers and technicians
– Skilled production operators
– Business managers
Comprehensive training programs Planned collaboration with Singapore research institutions