Australia can become a global superpower in solar PV energy generation and export, but it must develop its own fully integrated domestic solar supply chains to do so, according to a landmark new report.
The Australian Silicon Action Plan sets out the actions Australia needs to take to participate in a fully-fledged supply chain for silicon and solar cells – a critical step towards energy security and independence, which will also support economic growth and jobs across Australia’s regions and cities.
The report is authored by PwC Australia, commissioned by Australia’s national science agency CSIRO, and finds that while Australia has great potential when it comes to the leading role it can play in the energy transition, its reliance on overseas supply chains risks holding us back.
The Australian Government has identified silicon as a critical mineral, given its current supply chain risks and its importance to new economy technologies such as solar cells, semiconductors (chips), optical fibres, aluminium alloys, and its potential use in energy storage batteries. Silicon is abundant in Australia in the form of quartz, but it is the process of smelting quartz to silicon, then to high purity silicon that requires attention.
“Australia already has the highest per capita deployment of rooftop solar in the world, and there are several mega-projects in the solar development pipeline,” said CSIRO Senior Principal Research Scientist Dr Chris Vernon.
“But one of the greatest risks to Australia’s solar ambitions and energy future is our reliance on overseas supply chains for solar cell technology,” Dr Vernon said.
According to the report, increasing production of silicon in Australia is the first step for Australia to develop its own capability and capacity in the solar cell supply chain.
"Energy independence should be a top priority for Australia. The increasing pace of the energy transition and ever-increasing international demand for solar PV, combined with an ever-present focus on ESG issues, highlights the fragility of our current supply chains, and makes the pursuit of energy independence all the more important,” said Dr Vernon.
Demand for solar power and current supply chain dynamics means Australia must grasp the opportunity now
Between 2021 and 2050, solar PV’s contribution to the energy mix in Australia is expected to increase from 12 per cent to approximately 50 per cent, while according to the International Renewable Energy Agency, estimated annual global solar power generation capacity must increase more than five-fold by 2030, and 14-fold by 2050 to stay on track for net-zero targets.
To keep pace with these solar capacity forecasts, annual global production of silicon and its purified form - polysilicon - will have to materially increase.
But despite our reliance on solar generation set to grow, current supply chain dynamics pose an energy security risk for Australia. Geopolitical tensions, natural disasters, climate change, energy market issues and COVID-19 have highlighted the fragility of our current supply chains.
Around 70 per cent of silicon is produced in China, while China also dominates the production of polysilicon. The conversion of polysilicon to solar cells is even more concentrated, with China accounting for between 75 per cent and 97 per cent of these stages of production.
How Australia can develop its own fully integrated silicon to solar cell supply chain
According to the Australian Silicon Action Plan, Australia can develop a fully integrated silicon and solar cell supply chain, from quartz mining through to manufacturing, end-of-life processes, and recycling to support and de-risk the overall solar supply chain.
The Australian Silicon Action Plan sets out recommendations and actions to take across three horizons:
- Horizon one - actions that can commence immediately as first steps to developing an integrated silicon and solar cell supply chain. These include identifying potential locations for new smelting facilities, integrating renewable power into smelting processes, and research funding into next generation processes and technologies.
- Horizon two - actions focused on expanding Australia’s supply chain activity, such as developing more complex supply chain steps of manufacturing components for solar cells
- Horizon three - actions that will lead to an integrated, low-carbon and circular solar cell supply chain in Australia, such as supporting polysilicon production and focusing R&D efforts on developing and scaling emerging and future technologies.
“Australia has enormous potential when it comes to supplying solar power for its own and also the region’s energy needs, but our current reliance on concentrated silicon and solar cell supply chains poses risks to Australia’s energy independence,” Dr Vernon said.
“The Australian Silicon Action Plan suggests a pathway for the creation of an industry that has the potential to provide employment and reskilling opportunities, the delivery of significant economic benefits that come from adding value to Australia’s mineral endowment, development of new industries in regional Australia with the world’s best ESG standards, all while improving Australia’s energy security and independence
“This vision will not be achieved without a high level of collaboration between all stakeholders, from miners and refiners to state and federal governments, to R&D providers, to the manufacturing industry.”