Will the outbreak of the Russia-Ukraine conflict affect photovoltaics?
1. The impact of the Russian-Ukrainian conflict on local photovoltaics
If you only look at the development of new energy in Russia and Ukraine, as of July 2021, Ukraine's total installed photovoltaic capacity has reached 7.74GW, of which 6.4GW is installed on the ground and 933MW is installed in households. In 2021, Russia will add only 233 megawatts of photovoltaics, with a cumulative installed capacity of about 2GW.
The Russian-Ukrainian conflict should have an impact on the installed capacity of both countries in 2022, especially in Ukraine, where there is too much to do in post-war reconstruction. However, the newly installed capacity of Russia and Ukraine is too small in the global photovoltaic market, and has little impact on the new installed capacity of global photovoltaics.
2. Impact of Russia-Ukraine conflict on PV supply
Although the installed capacity of Russia and Ukraine will not affect the world, the impact of the conflict itself on the global photovoltaic market should not be underestimated. The first is the direct conflict of the conflict on the PV supply market.
In the field of electronic semiconductors, electronic special gases (electronic special gases) are one of the indispensable basic and supporting materials in the production of electronic industries such as large-scale integrated circuits, flat-panel display devices, compound semiconductor devices, solar cells, and optical fibers. Electronic special gas plays an important role in many production links of solar cells, including diffusion, etching, deposition and other processes.
Ukraine is a major supplier of semiconductor raw materials, mainly producing neon, krypton and xenon, supplying 70% of the global demand for neon, 40% of krypton and 30% of xenon. More than 90% of the supply of semiconductor-grade neon gas in the United States comes from Russia and Ukraine. The conflict between Russia and Ukraine may affect the supply of inert gas in the region. The reduction in gas supply will cause prices to rise, and silicon wafer production costs may rise accordingly.
However, the cost of electronic gas accounts for 5%-6% of the total cost of IC materials, and the impact on the cost of silicon wafers and batteries should not be too great.
3. The impact of the Russian-Ukrainian conflict on new global installed capacity
The installed capacity of Russia and Ukraine will not affect the world, but the Russian-Ukrainian conflict itself will affect the global expectations for new installed capacity.
After the Russian-Ukrainian conflict broke out, the most immediate crisis in Europe was the energy crisis. On the one hand, the Nord Stream 2 was suspended indefinitely. On the other hand, as the conflict escalated, Europe's energy supply faced increasing risks. Europe depends on Russia for more than a third of its natural gas supplies, and although Russian gas deliveries to the European Union via Ukraine are proceeding normally and Russia says its overseas gas supplies are "uninterrupted", European gas, coal and crude oil futures have surged.
With the escalation of sanctions in Europe and the United States, Europe has restricted Russia's use of the border Bank Swift clearing system. Any sanctions that restrict Russia's access to foreign exchange may upend commodity markets such as oil, gas, metals and crops, and the escalation of sanctions may also lead Russia to cut off natural gas. supply in retaliation.
Therefore, the conflict between Russia and Ukraine will have a positive impact on the acceleration of the replacement of traditional energy by new energy in Europe. The whole of Europe and the United States will be the second largest installed capacity market in the world in 2021, and it is expected to have more than 26GW, an increase of more than 30% year-on-year compared with the newly installed capacity in 2020.
Europe faces a shortage of natural gas inventories in 2021, which has stimulated the adjustment of the EU's RED II plan (increasing the proportion of renewable energy and accelerating the carbon neutrality agenda), and Germany and other countries have formulated more aggressive renewable energy plans. The sudden outbreak of the Russian-Ukrainian conflict in 2022 will once again push European countries to attach importance to energy security and energy independence, and to meet this demand will inevitably rely on the needs of wind power, photovoltaics and nuclear power, of which photovoltaics are the focus.
At the end of last year, we expected that Europe is expected to achieve more than 30GW of new photovoltaic installations in 2022. Now it seems that Europe is likely to accelerate photovoltaic application, and an annual increase of 35 or even 40GW is possible.
In addition to the tension in Europe, the conflict between Russia and Ukraine may affect shipping prices, and tight crude oil supplies may stimulate global demand for new energy. At least judging from the stock market last week, when the Russian-Ukrainian conflict triggered violent shocks in the global stock market, China's photovoltaic sector is doing quite well, right? ? The return of the trillion-dollar photovoltaic track is obvious, and the photovoltaic 50ETF rose by 1.53%...
4. The conflict between Russia and Ukraine may increase the tension of silicon materials
Will there be a surplus of silicon in 2022? In the article, the analysis points out that the ratio of silicon material production to module shipments in 2022 will be around 1.5 based on the annual newly installed capacity of 220GW. Based on the optimistic forecast of 270GW, the supply-demand ratio will be around 1.34, which is a moderately loose supply-demand balance point. The price of silicon material is expected to be stable with some decline throughout the year.
However, since the conflict between Russia and Ukraine has accelerated the global expectation for new energy installations, photovoltaics, as the most important pillar of new energy, may exceed the previously expected upper limit of newly installed capacity, and the demand for silicon materials may increase. However, the supply of silicon materials may be affected by conflicts. For example, Germany's Wacker, the main supplier of silicon materials in Europe, may be restricted by various factors such as energy prices, energy supply, and shipping. Both production and delivery may be affected.
In this way, the ratio of silicon material supply to module demand is likely to fall below 1.3, even close to 1.2, which represents a very tight supply in the previous analysis, which will be a major blow to all expectations that the supply of silicon material will ease and the price of silicon material will fall.
The conflict between Russia and Ukraine has made the photovoltaic installation in 2022 more optimistic, but it has made the price trend of silicon materials more confusing.