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In an interview on Wednesday May 24, Jayson Tymko, chief executive officer of upstart North American silicon producer Sinova Global, emphasized that massive growth in Western high-purity silicon production will be essential to support the ambitious goals of the US’s landmark IRA, passed in August 2022, and the wider renewable energy transition.
Sinova broke ground on its Tennessee silicon plant in October 2022 and expects to have a capacity of 120,000 tonnes of high-grade silicon metal upon building completion. The company will produce a product for EV battery anodes and 1101, 2202, 3303, 421 and 441 grades of silicon metal, all with low phosphorus and boron contents.
The plant will enter production as the Western world – led by the US – readdresses its silicon supply chain to meet the new demand for renewable energy, for which high-grade polysilicon used in solar panels is a vital component.
Global polysilicon production is currently heavily concentrated in China, which provided some 79.4% of global production in 2021, according to the International Energy Agency (IEA), but other countries, including the US have introduced policies, including the IRA, designed to onshore the supply chain and boost domestic production.
According to Tymko, the IRA features lofty goals that require a drastic increase in domestic production of the raw materials vital for the technology and renewable energy sectors featuring heavily in the legislation.
The act aims to boost clean energy and domestic production of high-tech products while onshoring and securing the entire production supply chain and laid bare shortages of domestically produced raw materials, including silicon.
“A month after the IRA was passed, we had the chief strategist for each sector – computer chip, solar panel, and EVs – reach out to us and go, ‘we’ve realized we have a big problem – we don’t have enough raw material to feed into our end products’,” Tymko said.
“[US President Joe] Biden’s Inflation Reduction Act is bringing back US polysilicon production in a big way, it is going from a very small sector to more than double its historic size, almost overnight,” he said.
The production of photovoltaic solar cells, currently concentrated in China, has come into increasing focus in recent years, as Western economies move to reestablish significant production to help meet the lofty goals of net-zero 2030 energy commitments.
In comments to Fastmarkets, Becca Jones-Albertus, acting deputy assistant secretary of renewable power and director of the Solar Energy Technologies Office at the US Department of Energy (DOE), hailed recent US Government support for the solar sector.
“Since taking office, the Biden-Harris administration has made unprecedented investments in clean energy,” Jones-Albertus said, adding that the US intends to move to secure supply and onshore solar panel production locally.
Risks related to China’s dominance of the supply chain for solar panels have been exposed in recent years after the US banned imports of some Chinese solar materials believed by the US to involve forced labor in major polysilicon-producing region Xinjiang.
This move, along with other “policy-driven supply constraints,” saw a steep drop in solar installations in the US in 2022, according to analysis by the Solar Energy Industries Association (SEIA) and Wood Mackenzie.
This, according to Tymko, is a major factor pushing Western markets to move away from the consumption of China-origin silicon and polysilicon.
“In the US we’ve had duties against Chinese silicon metal of 139% for the last 30 years and these tariffs are not going away… [in fact] every country including Europe is increasing their duties against Chinese material,” he said.
He predicted that domestic silicon production capacity could be outstripped by demand related to new solar projects by 2030.
“The US currently has around 190 gigawatts [of solar energy capacity] installed, they have 6,000 solar farms approved on the books to be built,” he said, adding: “They’re trying to get up to one terawatt of power [generation from solar] by 2030, but I don’t see how this is possible.”
Tymko calculates that the US will need to produce an average of around 700,000 tonnes of silicon per year to meet the demand for solar production alone (based on current solar panel energy yields), far outstripping current production capacity.
“The competition for silicon metal is going to be enormous,” he said.
Global investment in new solar production is expected to overtake that for new oil production in 2023, reaching $382 billion, according to the IEA, up from $127 billion in 2013.
Silicon metal prices, as assessed by Fastmarkets, have also increased markedly in the past decade, though solar has continued to represent a relatively minor end use for the material.
Fastmarkets’ price assessment for silicon, ddp US averaged 352.40-403.56 cents per lb in 2022. In 2013, the price averaged 109.13-114.03 cents per lb.
The price was most recently assessed at 175-200 cents per lb on May 25, with the market softening considerably this year on weak demand.
Fastmarkets’ price assessment for silicon grade 4-4-1 99% Si min, in-whs Rotterdam averaged €3,926.54-4,343.46 ($4,209-4,655) per tonne in 2022, up from €1,941.09-2,031.98 per tonne in 2013.
Alongside additional demand from the solar sector, Tymko predicted that increased production of computer chips and EVs would also significantly increase demand for high-purity silicon metal.
Computer chips use high-purity polysilicon, while EVs can use silicon as a battery anode and in high-strength, low weight aluminium alloys.
“I expect all three sectors to be competitive,” Tymko said, hailing the material’s broad uses for the green energy transition.
“We call silicon the base building block of a green energy transition,” he said.
According to projections cited by Tymko, EV and battery anodes will present a 400-times increase in demand to reach IRA goals, while semiconductor demand will multiply by five, both relative to 2022 production levels.
Citing IEA figures, he predicted demand from new markets to revolutionize overall silicon demand and calculates that solar and semi-conductor demand will rise to constitute 33% of overall capacity in the next five years, with EV demand rising to 28%.
Eventually, he predicted that price support from the new end-uses could make silicon too expensive for some of its traditional end-uses, potentially pushing consumers to use alternative materials.
Despite his overall optimism regarding increased demand, Tymko did acknowledge some significant challenges facing silicon producers in the coming years, namely the availability of high-purity, high-quality quartz and uncertainty about technology developments that could transfer some demand away from silicon.
“If you look at the feedstock… everyone is saying we’re looking for high-quality quartz,” Tymko said, adding that known high-quality quartz reserves are concentrated in Spain, Canada and Australia.
Access to high-quality quartz was identified as a priority of leading silicon producer Ferroglobe in its financial results for the first quarter of 2023.
“High-quality quartz is the most important raw material used in the production of high-purity silicon metal,” Ferroglobe CEO Marco Levi said.
Sinova, Tymko believes, is well placed to overcome this challenge, and is developing and expanding production at its Quartz mine in Canada, which is permitted for over 1 million tonnes of annual quartz production.
Asked about how the potential developments in alternative technologies, including cadmium telluride (CdTe) solar cells, which use less silicon metal, might impact his company’s plans, he was optimistic that silicon-based solar technology is entrenched enough to remain prevalent in the coming years.
“We’re familiar with alternatives…The costliness of them is certainly a bit of a challenge, but everything comes down a little bit over time,” he said.
“But when I look at all the solar plants being built in North America, those guys don’t retool overnight, and they’re [overwhelmingly] building polysilicon-based solar panels.”
On CdTe, the DOE’s Jones-Albertus was more positive.
“The US is already the leader in CdTe technology, the second most common photovoltaic (PV) technology after silicon, and DOE recently announced $24 million in funding for innovative research, development, and demonstration projects that will help more US companies advance CdTe PV and other next-generation solar technologies,” she said.
“CdTe technology has a strong, US-focused supply chain that is currently growing significantly, positioning CdTe to continue to be an important US solar technology in the years to come,” she said.
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