TrendForce：Japan’s Zero Nuclear Power Issue Triples PV Market Demand in 2013

Regular inspections have been conducted on the No.4 reactor at the Oi nuclear power plant. However, delay on the inspections has once again led to Japan’s “zero nuclear power” status. Since nuclear power is still the major source of base-load electricity while other units are still applying for re-activation, it’s estimated that it will take at least half a year to complete security inspection. According to EnergyTrend, a research division of TrendForce, the “zero nuclear power” state will force Japan to accelerate the development of renewable energy. Among all, demand from solar energy is likely to go upward. The total amount of grid-connected installation may reach 7GW in 2013, which will triple the installation amount last year.

According to the data collected by the Federation of Electric Power Companies of Japan (FEPC), Japan’s base-load electricity mainly focuses on Hydropower (inflow type) and nuclear power. Coal-fired and gas-fired power would belong to medium-load electricity and Fuel oil and other energies would be categorized in peak-load electricity. Ever since the Fukushima nuclear disaster, most of the nuclear power plants have been suspended, which has lowered the usage of nuclear power from 33% in 2010 to 2.15% in 2012. The power shortage caused by the decline of nuclear power has been filled by thermal power generation. According to the statistical data, the top ten power companies have significantly increased the usage of thermal power generation from 59.05% in 2010 to 89.82% in 2012, which caused Japan to import large quantities of coal, oil, natural gas and other fuels.

Japan's top ten power generation scale comparison chart
 
Source: EnergyTrend

Besides, from power supply and demand aspect, Japan’s supply and demand ratio has  remained at around 1.05 in the past three years. However, based on the total amount of power generated in 2010, the supply and demand ratio has dropped to 0.753 after deducting the amount of nuclear power generated. In order to solve the insufficient power supply problems caused by the suspension of nuclear power plant after 2011, increasing the usage of renewable energy has become another solution for the Japanese government and manufacturers, aside from the solution to adopt more thermal power generation.

As indicated by relevant data, power companies have continued to purchase more power generated from wind and solar energy. According to the data, Japan’s top ten power companies have purchased much more power generated from solar energy since 2008. The annual growth rate increased from 9.25% in 2008 to 45.89% in 2011. As for wind energy, although the annual growth rate has been fluctuating, power purchased by power companies has also continued to increase. On the other hand, according to EnergyTrend’s statistics, the amount of grid-connected installations in Japan has continued to increase. In addition, it will take at least half a year for nuclear power plants to meet the security check request and re-activation safety requirements and it would be difficult to project the time needed to receive the re-activation approval from the local government, thus demand in the Japanese market have obviously gone upward this year.

Estimation of Japan’s Amount of Grid-Connected Installation in 2013
 
Source: EnergyTrend3Q13 Gold-Member Report

Judging from spot market’s overall performance, Chinese polysilicon price remained between RMB130/kg-RMB140/kg. Since average price slightly dropped to the range of RMB132/kg-RMB135/kg, last week’s average price came to US$16.985/kg, a 0.09% drop. For silicon wafers, both buyers and sellers are still bargaining over the price. Some manufacturers indicate that they are still hoping to revise price upward but it will have to depend on future market condition. Last week’s silicon wafer price remained flat. For cells, demand in September was 20%-30% higher than that in August. Moreover, with the increased Japanese orders, cell price for Taiwan’s first-tier manufacturers slightly increased again with last week’s average price reaching US$0.391/Watt, a 0.26% rise. For modules, last week’s average price remained steady.