Specialty Chemicals: Essential in Energy Transition

Carbon reduction policies are pushing the replacement of fossil type of energy with renewable energy. Solar power and wind power are regarded as the two pure renewable energies. Specialty materials are supporting manufacturing solar panels and wind turbines. Installations of solar modules and wind turbines are growing fast driven by incentive policies in regions from Europe, Americas to China and other Asia. The global outlook for the special materials is very optimistic currently and in the next couple of years.

Solar Power

The solar panel market is growing due to various factors such as declining costs of solar panels, supportive government policies and incentives, and increasing awareness about the benefits of renewable energy. The photovoltaic module (solar panels) technology is progressing very fast. The third generation of PV cell technology has been under research, current market is still dominated by the first generation, mainly crystal silicon cells. The share of single silicon PERC cell has increased from 6% in 2016 to 84% in 2021, effectively replacing polysilicon BSF cell. N-type single-silicon cells will become mainstream by 2026. In order to decrease the price of PV module, one side is to improve the conversion rate of the PV cells continuously, the other side is to reduce the manufacturing cost of the modules. From the history experiences, improving the cell's conversion rate is rather difficult. The industry tends to focus on innovations at module level, decreasing the unit material demand and declining the material prices at the same time. Module cost fell more than 70% in the past six years. The consumption pattern of the special materials has also been changed along with rapid technology development.

PV cell is the core component, which is sandwiched by front sheet and back sheet. Single silicon has replaced polysilicon to become the mainstream cell materials since 2023 with a higher conversion rate. Volume consumption of single silicon will grow slower compared with PV installation due to the continuous improving of the module efficiency, adoption of large sized wafer, and making the wafer thinner and thinner. Back sheet is used to protect and support the PV cell. The excellent high-low temperature resistance, UV-radiation resistance, environmental-aging resistance are highly demanded to keep a long life expectancy of 25 years. A polyester film acts core layer, while the outer layers have been dominated by fluoropolymer film, like PVDF and PVF. The continued pressure to reduce the cost has led to the development of non-fluoropolymer back sheet. Some back sheet producer developed the so-called fluorine skin, which is essentially a fluorine coating, can fully address the UV protection concern on cell side. Fluoropolymer consumption grow slower than PET film during 2018 and 2022. Glass is replacing plastic back sheet currently along with increase of bifacial module market share. However, transparent fluoropolymer back sheet may replace glass from 2027 on due to its light-weight advantage. EVA is currently the prevailing PV encapsulant with 76% of the market in 2022. The amount of encapsulant consumed per watt is gradually decreasing due to the substantial increase in the module efficiency. The average area of encapsulant required per 1GW decreased to 9.0 million m2 in 2022 compared to 11 million m2 in 2019. The need for encapsulants will be slightly offset by an increase in PV module production, which will reduce encapsulant demand by 20% during the next five years. POE is rising as an alternative to EVA owing to its superior properties, like moisture barrier, volume resistivity, and weathering resistance. But laminates of EVA and POE is better solution to balance the property and the cost.

Global market value of specialty materials for manufacturing PV modules has reached $35 billion in 2021, with 9.3% of average annual growth rate in the period of 2022 and 2027 in term of volume.

Wind Turbines

For wind turbine generator, turbine upscaling is focused on the generator power rating. Increased wind turbine nominal rating has been one of the main drivers behind lower wind energy costs, and the consumed special materials. New innovative wind turbine designs increase the efficiency and cope with the mechanical stress taller turbines face. These advanced material system with better properties such as low density, longer life. Higher performance, ease of processing, capability of recycling, less expensive. The wind turbine with this material system provides an optimal aerodynamic performance, reduce gravity forces and reduce material degradation during its operational stage, leading to better life-cycle.

Wind turbine involve in blade composites, specialty coatings and specialty lubricants. At present, mainstream blade manufacturers all use epoxy resin as the base material for blade infusion molding. Glass and carbon fibers are used to reinforce the polymer. Glass fiber is still the mainstream product because of its excellent performance and cost-effectiveness. As the power of wind turbine increases, the blade is becoming longer. Carbon fiber can reduce the mass of blade, enhance the stiffness of blade, and improve the fatigue resistance of the blade. Carbon fiber demand is expected to rise. The main film-forming resins of coatings for blades include: polyurethane resin, epoxy resin and some functional resins such as fluorine resin and silicone resin. lubrication system is one of the most important components of wind turbine maintenance, which ensures the expensive pieces of wind turbine are efficiently generating electricity. It is estimated that more than 80% of the lubricants used within the wind turbine industry are synthetic. The synthetic lubricants, which are typically polyalphaolefin-based, that are used for wind turbine maintenance can be further subdivided into hydraulic fluid, grease and gear oil. Gear oil is the most important lubricant category, followed by hydraulic fluid and grease.

The global market value for wind turbine chemcials has reached $3.93 billion in 2021, with the average annual growth rate to be 6.5% from 2022 to 2027 in term of volume.

S&P Global's Specialty Chemicals Update Program- Green Power Materials is the comprehensive and trusted guide for anyone seeking information on this industry.

This report can help you

• Identify the competitive environment and key players
• Assess key issues facing both suppliers and their end-use customers
• Understand industry integration strategies
• Keep abreast of industry structure changes, regulatory requirements, and other factors affecting profitability
• Identify new business opportunities and threats
• Follow important commercial developments
• Recognize trends and driving forces influencing specialty chemical markets

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.