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NGC pushing integrated US$1.3b solar project
National Energy (NEC), wholly-owned subsidiary of the National Gas Company, is promoting a solar energy park project, with an estimated total cost of close to US$1.3 billion, which is expected to allow T&T to deepen its footprint in the renewable energy manufacturing business and could be a growth pole of future diversification for T&T.
National Gas Company (NGC) president Mark Loquan had first announced the project while delivering remarks on first day of the Clean Energy conference, which was held last Thursday and Friday.
The Business Guardian subsequently emailed questions to the state-owned NGC for responses about the project.
Loquan had said during the construction phase of the project 3,000 jobs are expected to be created and a further 2,000 permanent jobs to be created after.
Asked about the nature of the project, NGC said, “The Solar Energy Park Project will allow T&T to enter into the renewable energy manufacturing business.
“The park envisions a cluster which produces components along the entire value chain for solar PV panels and consists of four plants: a metallurgical grade silica plant, a poly-silica plant, a float glass plant, and an integrated photovoltaic (PV) plant.”
Referring to the cost of the project NGC stated that it is be delivered in two phases.
“Phase one, which will include an integrated photovoltaic manufacturing plant and a float glass plant, is projected to cost approximately US $560 million.”
“The second phase of the project will entail construction of a metallurgical silicon plant and a polysilicon facility at a projected cost of approximately US $705 million.”
The park is expected to be located at the Tamana In-tech park as well as at Point Lisas.
“Tamana In-Tech Park and Point Lisas are currently being considered for Phase 1 of the project. Point Lisas is currently being considered as a possible location for Phase 2 of the project.”
At present, according to NGC, NEC is “actively” promoting the project and engaging potential investors.
An official with knowledge of the project, who requested anonymity because the project discussions are ongoing, said the original thinking behind the solar city project was that all four plants would be located at a site to the north of the Point Lisas Industrial Estate.
The official said: “It makes sense to co-locate all four modules of the solar city project in the same physical space because of the synergies inherent in doing that.
“Locating the integrated photovoltaic manufacturing plant and/or the float glass plant at the Tamana In-Tech reduces some of those synergies because it would add internal, road transportation costs to the overall manufactured cost of the final product as well as possible damage due to transporting goods from just outside Arima to Point Lisas.
“It needs to be understood that the manufacturing of solar panels is a low-margin business and therefore any costs that can be taken out of the manufacturing process will help in the feasibility of the project.
“There is also an obvious benefit in locating all four modules in Point Lisas because of the proximity to the port. The port on the Point Lisas Industrial Estate is likely to be important because the manufacture of a metallurgical grade silica would require the importation of silica from Guyana, which is reputed to have some of the finest sources of the commodity in the world.”
The location of the project within proximity of the Point Lisas port is also important, said the official, because the manufacture of solar panels is primarily an export business, earning US dollars.
“The location of all four modules of the project next to the port is crucial not just for the import of raw materials but for the export of the finished product. The only thing that would be used locally would be a little of the float glass. Everything else would be exported.”
The official noted that the language in the NGC response referred to envisioning the establishment of a “park” and a “cluster” of plants that would produce components along the entire value chain for solar PV panels.
The concept of a cluster refers to the geographic concentration of interconnected businesses, suppliers, and associated institutions in a particular field, which serves to increase the productivity with which the companies in the cluster can compete globally.
The official also noted that the original thinking behind the solar city project was that the metallurgical grade silica plant would be produce a commodity that would be an input into the polysilicon plant.
The polysilicon would then be an input into the integrated photovoltaic (PV) plant, which would also have the float glass as an input.
“This arrangement suggests that the four modules would work optimally if they are located close to each other.”
Also, because the polysilicon plant is especially energy intensive, there would need to be a long-term guaranteed agreement for both natural gas and electricity, which may be another advantage of locating all four plants in Point Lisas.
The original solar city project was a significant aspect of the InvesTT proposal during its interaction with officials during the official visit by former Prime Minister Kamla-Persad-Bissessar to China in February 2014.
At that time, the solar park concept had already been the subject of a close to two-year feasibility study, which established that the construction of the park at Point Lisas would be bankable, given certain assumptions.
According to the official, given the more than three-year between the completion of the feasibility study and now, the study would need to be refreshed with a new scan of the international business environment for the production of solar panels.
With reporting by Nadaleen Singh