INTERVIEW-Abu Dhabi to invest $2 bln in thin-film technology

FRANKFURT Thu May 29, 2008 9:28pm IST

Stocks

   

FRANKFURT May 29 (Reuters) - Abu Dhabi says it will invest $2 billion in cutting edge solar technology, building thin-film module production plants in Germany and Abu Dhabi, as it strives to compete with industry leaders such as First Solar (FSLR.O).

Masdar PV is part of Masdar Initiative, a $15 billion initiative set up by the Abu Dhabi government to develop sustainable energy and other clean technologies.

"We are making a very large investment in what will eventually become a gigawatt multi-country producer, one of the leading producers globally in thin-film," said Steve Geiger, director of special projects at Masdar.

Thin-film solar modules are less efficient at turning sunlight into electricity than silicon-based equivalents, but production costs are lower because they use little of the currently scarce solar-grade silicon, if at all.

Masdar plans to set up two thin-film production plants, the first in Erfurt, Germany, and the second in Abu Dhabi, with a combined annual production capacity of 210 megawatt. Further sites could follow, possibly in the United States.

It aims to reach 1 gigawatt of capacity by 2014.

"The idea is to have a smart copy process by which, once we have the German facility started, to smart copy that back into an even larger facility in Abu Dhabi and into other countries as well," Geiger said.

Masdar picked the world's largest photovoltaic market for its first move to benefit from local expertise as well as from a favourable government support scheme for renewable energy.

"We appreciate the support that the government is providing, allowing us to attract and develop high-tech workers to make us competitive and successful in what is arguably one of the most competitive industries in the world," Geiger said.

PRIME COMPETITOR

Masdar PV is striving for the top, aiming to compete with the world's largest thin-film makers, such as First Solar.

"Since they are the world's leading photovoltaic thin-film company today and they are growing very, very aggressively they would clearly be one of our prime competitors," Geiger said, referring to First Solar.

Abu Dhabi's move, however, raised concern that such large investments could drive smaller German solar companies out.

"This will trigger a wave of consolidation," said Heino Ruland, market analyst at FrankfurtInvest.

Shares in European solar companies such as Renewable Energy Corporation (REC.OL), SolarWorld SWVG.DE and Q-Cells QCEG.DE plummeted on Thursday, also after Merrill Lynch downgraded the stocks to "sell" from neutral".

"Photovoltaic has really entered a different stage, where it's a volume game and it's a multi-country platform game," Masdar's Geiger said and referred to the market as so-called "solar 2.0".

"We are very lucky that we have the firepower to place multiple bets on multiple technologies," he said.

The Masdar Initiative is focused around a new, zero carbon-emitting "green" city to be completed by 2015 which it says will be the hub of clean technology businesses, research and deployment as well as home to 40,000-50,000 people and a workplace for another 40,000 commuters. (Editing by Sue Thomas)

REUTERS SHOWCASE

2015: India Outlook

2015: India Outlook

India in 2014: A dream run for markets  Full Article 

Funding Woes

Funding Woes

Co-founder of SpiceJet seeks time to finalise rescue  Full Article 

Regulating Airfares

Regulating Airfares

India considers temporary cap on airfares - government official  Full Article 

Flying Back on Course

Flying Back on Course

The inside story of the new Airbus A350 jet  Full Article 

Oil Price Forecast

Oil Price Forecast

Oil prices likely to rebound in second half of 2015: poll  Full Article 

Cyber Attacks

Cyber Attacks

China condemns cyberattacks, but says no proof N.Korea hacked Sony  Full Article 

Connecting Markets

Connecting Markets

China stock connect scheme scorecard throws up surprises  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage