Will NGD™ Make Thin Film Cost Competitive with Coal?

published: 2011-06-09 11:17 | editor: | category: Knowledge

For hundred of years, the developed world has relied on coal to help meet its energy needs. Enerdata, an independent Information and consulting company, which specializes in the energy industry, reports that coal-fired plants generated 40 percent of the world's electricity in 2009. The United States received 45 percent of its electricity from coal. The EU depended on coal for about 25 percent of its needs; China used coal to generate about 80 percent of its electricity.

Increasingly, concerns about the pollution of land, water, and air have led to the cancellation of plans for the construction of numerous coal-fired plants. On the other hand, technological advances, and declines in installation costs, have made solar more competitive with coal. Solar industry analysts list cost installation as the main impediment for significant market penetration of photovoltaic (PV) panels. Thin film PV costs around $0.16 per kilowatt-hour (kWh). The Department of Energy reports the average retail price of electricity at 0.10 kWh in November 2010.

According to CEO of Canadian Solar Inc. (CSIQ) Shawn Qu, “In many markets, solar is already competitive with peak electricity prices, such as in California and Japan.” As nations around the world heed the call for solar and other clean energy solution, the demand for photovoltaic (PV) systems grew at an average annual rate of 51 percent, from 2000 through 2009. Total PV capacity grew from 170 MW to 7,059 MW. 

Most of the world's solar installations consist of crystalline technology, which offers greater efficiency - a key for installations in constricted spaces. Over the past few years, thin film technologies have made significant inroads into the PV market. In 2010, 44 percent of the photovoltaic projects in the U.S. used thin film panels.

Thin Film Requires Rare Elements

PV technology has made steady progress toward reaching a goal of $1/watt for thin film. Even on achieving this objective, the question remains whether thin film manufacturers will have the necessary supply of rare elements -- tellurium, indium and gallium, currently necessary for most thin film manufacturing processes. In addition, thin film manufacturers compete with television and electronic makers for these scarce elements. The move away from traditional fossil fuel power generation requires the ability to scale production to 10 trillion watts (ten terawatts) to meet global electricity demands.

Quantum Solar Power Corporation: NGD™ 

One company has filed for a patent on technology that it promises will change the energy landscape. Quantum Solar Power Corp (OTCBB: QSPW) --   headquarters in Santa Fe, New Mexico and operations in Vancouver, British Columbia, announced the development of a cutting-edge solar technology called Next Generation Device™ (NGD™). Quantum management states on it website, NGD™ promises to make “first time power cost that are competitive with and potentially even less expensive than coal-burning electricity.” Quantum claims this innovative technology solves two issues that have stifled solar power as a viable and cost-effective alternative energy solution -- efficiency and scalability.

Quantum explains its product technology advantages for addressing efficiency and scalability in the following manner: “NGD™ promises minimum efficiencies of 20% PCE matching the most efficient commercial silicon PV and the theoretical limits of thin film. This combination makes NGD™ cost per kWh of only $0.10 as compared with the today's current average of $0.16/kWh. Finally, NGD™ technology is free of rare, toxic elements that prevent other solar technologies from reaching global deployment.”

Chief Technology Officer, Dr. Andras Pattantyus-Abraham, states, "We are extremely excited about the advancements we have made in the past several months. By eliminating the semiconductor layer in conventional PV as the primary absorber of photons, our patent-pending NGD™ would replace the need for rare elements that limit the terawatt-scale deployment of current photovoltaics.”

Quantum's Business Model

Quantum has no plans to manufacture its technology; however, it will team with partners expected to take on “modularization, sales, marketing, and order fulfillment for the product.” The company does plan to involve itself with the manufacturing and marketing functions of rolling out the NGD™ product. The company plans to craft structured revenue sharing agreements with strategic partners, Quantum hopes to move into profitability and realize substantial financial expansion by carrying out this strategy. Its strategic partner will have the responsibility for oversight of financial, regulatory and marketing NGD™.

Recently, Quantum hired Glasgow, Scotland based SgurrEnergy, a global engineering consulting firm that specializes in the renewable energy sector, to provide the firm advisory services. The company has a strong record of accomplishment of providing engineering and technical services for solar, wind, hydro and other projects. The agreement includes the recruitment of directors, officers and strategic partners.

Quantum's President and Chief Executive Officer Daryl Ehrmantraut made the following statement regarding the relationship: “SgurrEnergy is one of the industry leaders within the renewable energy sector to provide the advisory services Quantum needs to position us for future growth. If Sgurr is successful in bringing experienced renewable energy management and board members into Quantum, it will help us execute the next stage in our corporate strategy. We are excited to partner with SgurrEnergy, as this will accelerate our path to commercial success by helping us bring in talented individuals. We look forward to working with them as we attempt to redefine the solar energy landscape.”

Going Forward

Quantum claims NGD™ will compete with the price of electricity produced by coal-fired plants at $0.10 per kWh. This statement may not be too far fetch, especially in light of a recent study led by Harvard Medical School instructor, and associate director of the Center for Health and the Global Environment, Paul Epstein. Epstein puts the true cost of coal-generated electricity at $0.18 more per kWh. He argues the current cost does not take into account the medical and environmental costs of mining and power plant emissions, currently borne by taxpayers.

NGD™ sounds promising, and may truly prove a “disruptive new product solution for the conversion of solar energy to electricity.” Nonetheless, the technology remains in the testing and development phase. According to the latest documents filed with the SEC, Quantum, which has sustained a net loss of $1,647,716 since its inception, admits it has “limited operations.” It does not expect to earn any revenues until it completes development and testing.

This four-man firm competes with companies that have better brand recognition and deeper pockets. Their rivals have the resources necessary to adjust to industry, economic and policy changes. In addition, competition from other energy technologies, such as hydropower, geothermal, wind, and fossil fuels, as well as the need for funding, portend an uphill climb to bring a viable product to market.

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