HHI Muscles Into Solar Power Generation Business
By Kim Yoo-chul
Hyundai Heavy Industries (HHI), the world's biggest shipbuilder by assets, is muscling into the solar power development business.
``Probably, there would be a lot of competition in the downstream operations involving solar power. But we are very positive that there will be a lot of money to be made for a long time to come on the upstream element,'' company spokesman Cho Seung-woo said, Tuesday.
The company recently sealed a $30 million contract with Albatech, an affiliate of Meta system group. Under the agreement, it will supply seven-megawatt scale photovoltaic modules that could provide electricity to about 2,000 households.
``We laid a solid basis for market expansion in the European solar energy business through the partnership after advancing into Spain, Germany and the Netherlands,'' Cho said, adding his company will manufacture and deliver photovoltaic modules by next April.
In addition to shipbuilding and offshore exploration, it has added solar cell and module production to its new money portfolios.
The company has been operating 30-megawatt solar cell and 70-megawatt photovoltaic module plants in Eumsung, North Chungcheong Province through an investment of some $800 million since May. HHI is the only local chaebol producing solar cells and modules.
Its total production of solar cell and photovoltaic modules is expected to top 330-kilowatt by next year, boosting capacity by 11 times, through a partnership with KCC producing polysilicon.
Hyundai officials say the company plans to tap ingot and wafer business for a one-stop production.
Solar cell manufacturers have been racing to develop transferring robots for large size solar cells to meet a growing demand following the oil price hikes.
Delivery robots are strong enough to move the silicon-filled wafer tray to the processing chamber. Many local semiconductor equipment makers are tapping the solar cell manufacturing sector to meet the need.
HHI succeeded in localizing the production of sixth-generation liquid crystal display (LCD) glass transfer robots, which had previously been dominated by Japanese companies.
Together with LG Display, the world's No. 2 LCD panel supplier, Hyundai will supply 41 units to the display company from next month.
Unlike other robots, LCD transfer robots require high-tech know-how such as clean sealing technology and pollution prevention technology, they also differ in that the size and form of the robot changes depending on the size of the panel.
``In the future, we will expand our presence into the photovoltaic development robot market of which potential is great,'' another company spokesman Kim Kwang-kook said.
Uncertain Outlook in Korea
Although shipbuilders are joining hands with consumer electronics manufacturers to tap solar business as interest grows in alternative energy at a time of high oil prices and soaring awareness on environmental issues, the business outlook is uncertain in South Korea.
South Korea is a late player in the solar photovoltaic power market as it has mainly focused itself on developing large-scale centralized power plants using recycling energy.
Despite growing interest in solar energy, obstacles such as high costs and low political support are deterring faster commercialization and further installations in the country, according to research firms and analysts.
``Affordability and overwhelming political support are the major challenges with building integrated photovoltaic (BIPV) cells," market research firm Frost & Sullivan said.
``For example, market participants across Europe will now have to find ways to handle what many consider to be the two biggest challenges facing the BIPV market right now," it said, adding high capital costs could impede its large-scale commercialization.
BIPV refers to the photovoltaic materials that structurally serve as exteriors such as roofs, facades, or skylights. Solar energy is captured through the use of photovoltaic modules and used to generate electricity.
The South Korean government recently said it will invest 3 trillion won or $2.7 billion over the next five years to foster the green energy sector including solar energy, fuel cells and power plants.
But the plan is widely regarded as a one-time show-off announcement which does not contain any eye-catching blueprints.
``High installation costs can be partially addressed through an effective feed-in-tariff system and other tax incentives from the government,'' the research firm said.
The demand for BIPV systems in South Korea is driven by the government's goal of generating 1,300 megawatts by 2011 and solar subsidy programs.
``Well, solar cell business is unlikely to get strong momentum here in the near future. But we don't need to rush for the business as companies are in the initial stage of tapping the marketability,'' Hyundai's Kim said.