2013-3015 Solar power demand will require 11% of global mining supply

[Unobtanium]

Increased solar panel infrastructure in China and Japan will require 11% of one year's global mining supply.

If you skim over the article quickly it would be erroneous to assume that this is 11% of global supply per year. But it is actually ~3.8% of global supply per year over the next three years (91 million ounces required over the next three years, or 30.3 million ounces per year; assuming that global mining supply will be about 787 million ounces per year; therefore 30.3/787 = 3.8% per year).

But even so, that is a new global sink for silver of 3.8% per year, and that includes China and Japan only.

Bullish for silver nonetheless.

http://www.sprottgroup.com/thoughts/articles/the-sun-shines-on-silver/

Friday, July 26, 2013
David Franklin and David Baker

The Sun Shines on Silver

Solar power appears to be coming back with a vengeance on the back of recent announcements by China and Japan. Both countries are pushing for new programs to significantly increase their solar power capacity in the years ahead.

Last week, China’s State Council backed targets to more than quadruple the country’s solar generating capacity to 35 gigawatts by 2015. This target had been previously stated by China’s State Grid, which manages the country’s electricity distribution, but now has the official backing of China’s cabinet and its top governing body. According to the statement from the State Council, China will add around 10 GW per year from 2013-2015. If completed, this effort will significantly increase China’s solar power generating capacity, which stood at eight GW at the end of 2012.

Meanwhile, Japan is now expected to become the world’s largest solar energy market this year. According to a report by U.S. research firm IHS Inc., an estimated 5.3 gigawatts of generation capacity will be added this year, supplying the output roughly equivalent to five nuclear reactors.3 Japan’s domestic solar power market is forecast to reach $19.8 billion (¥1.91 trillion) in 2013, surpassing that of Germany, which was the biggest solar market from 2009 to 2012, according to IHS.

With 5.3 gigawatts of new capacity in Japan in 2013 and up to 30 gigawatts added in China over the next three years, the solar industry could potentially have a big impact in the silver market. Silver is a key component in solar panels due to its unique electrical conductive properties, with approximately 80kg of silver required to generate 1MW of electricity. According to the Silver Institute, one megawatt of solar power requires as much as 2.8 million ounces of silver.4 China and Japan’s solar projects combined will add up to 27 gigawatts over the next three years. This capacity will require approximately 91 million ounces of silver, which means that China and Japan’s new demand could consume up to 11% of global mine supply – and that’s if the world produces as much silver as it did in 2012.

Silver used in solar panels cannot be recycled and therefore disappears from the world’s silver stockpile. If China and Japan can follow-through with their respective solar programs, the silver market could benefit significantly. None of the 2013 silver price forecasts have incorporated these recent announcements, but the prospective numbers are big enough that they should.

 

[Unbeatable]

I know Europe was a big market for solar power that has dropped off the map in recent years which has dented silver demand.

This may make up that difference.

I was going to say that because of the amount of air and water pollution that China is suffering from, & Fukushima in Japan, I'm not surprised they are going down the solar panel route more but apparently solar panel factories are responsible for a lot of pollution themselves. I guess long term it has to be environmentally less damaging than other forms of energy generation. I haven't looked into it much.

I just think it's impossible to go wrong with silver. 20 Billion dollars of mining & scrap supply available at current prices a year. The Fed spends that in a week!

 

[pmbug]

That's a lot of gigawatts! /Dr. Emmett Brown

 

[Potemkin]

I read an article yesterday about the fact that Japan is reducing their nuclear power plant output (apparently due to the Fukushima event), so I suppose they will do whatever else eco-friendly renewable energy production.

Whatever this means, they will be consuming more and more silver.

 

[Potemkin]

China raises their target to 35 Gigawatts by 2015:
http://www.thestreet.com/story/11992649/1/a-photovoltaic-silver-bull-in-china.html

 

[ancona]

NASA finished the second of two solar plants a year or so ago, and it produces a tremendous amount of power that gets supplied to the Space Center and North Merritt Island. The thing is about twenty acres in size and uses state-of-the-art technology. The first one was built actually on the center at the old Launch Umbilical Tower storage site [LUT Garden], and is about half as large. There are plans to build another much larger site on the north end of the island that will supply about half of the electricity the center uses.

I'll be out there later this week so I will try and remember to get some pics.

 

[DCFusor]

Yeah, get some pix. I'm finding that solar panels are a great way to hold some of my silver. After all, they do pay dividends. In a few minutes, I'll be weed-whacking my garden with my electric whacker, while my Volt is charging off mine. That'll only take about an hour more - then the energy will be diverted to creating a hot shower. I'll have several kWh left over today, at least, after also filling the house batteries, for late video night hangouts on my new quad 24" screen computer system.

Should silver skyrocket - and stay there...I'm pretty sure they'll use something else in panels (and it won't be as efficient or reliable), but till then the makers will keep using Ag...That last big spike to the high 40's didn't last long enough to make much difference to the industry.

Note, China has overcapacity on panel production currently, and has been "dumping" on Europe. They just settled a deal to make Chinese panels cost more there, as the dumping price was ruining some local panel makers. There's some controversy about whether the deal is real/good enough.
Not sure how that's going to affect demand over the longer haul. I know a friend just bought Chinese (Canadian solar is a Chinese outfit) panels for his new homestead at 85c/watt...not bad from his standpoint. This of course has killed some American makers, and even the German Schott, who had some factories here, but we seem to be fine with that. We never learn.

I myself am practically out of the game as a buyer. Once you cover the entire roof of every building that isn't in the shade, you kinda stop buying more. At this point, it's a game on a sunny day - find some use for all that power that would otherwise just fall on the ground - the charge controllers basically dump any excess once the main batteries are full - and you might as well come up with loads that use the extra they have. What's really nice is now I have enough "over capacity" to be fine even on mostly-cloudy days - on those, I don't charge cars, or heat water (much), but I get to full batteries daily with all the other household loads running (shop, microwave, computers, lights).

This makes me really happy. This year I've used triple the gasoline in my lawn tractor etc than I have in my car and truck - piddly. Just one of the "dividends" precious metals aren't supposed to be paying...

 

[Unobtanium]

A similar, and very good, article on this subject at Casey Research:

http://www.caseyresearch.com/articles/a-photovoltaic-silver-bull-in-china

Here are a couple charts. The first one shows the uncanny track of the annualized average silver price with solar power demand. Coincidence or not? If this trend holds, then 2013 and beyond should show the price rising at least back up into $30's per ounce.

The second shows China's solar power demand for silver vs the rest of the world.

 

[DoChenRollingBearing]

...

Interesting thread, thanks Unobtanium and above repliers.

Green energy is something I have given very little attention to. But, with Fukushima and likely higher oil prices, it looks like I will be.

 

[ancona]

I still have my stack-o-panels, but as I've already said, I'll have to wait for the Zombie Apocalypse to friggin' use them. Municipal government sucks a dogs balls. they are nothing but petty little tyrants who have a little bit of power, so they use it at every turn to crush the little guys nuts. Fucking bastards!!