Renewable Energy Corporation
|This article's factual accuracy may be compromised due to out-of-date information. (October 2013)|
|Type||Public limited company (Allmennaksjeselskap)|
|Traded as||OSE: REC|
|Products||Polysilicon, wafers, solar cells, solar modules|
|Revenue||NOK 13.78 billion (2010)|
|Operating income||NOK 1.018 billion (2010)|
|Profit||NOK 989 million (2010)|
|Total assets||NOK 36.87 billion (end 2010)|
|Total equity||NOK 22.15 billion (end 2010)|
|Employees||4,200 (end 2010)|
The Renewable Energy Corporation (REC) is a solar power company with headquarters in Norway. REC produces silicon materials for photovoltaics (PV) applications and multicrystalline wafers, as well as solar cells and modules. REC's business activities are organized into three divisions: REC Silicon, REC Solar, and REC Wafer.[dated info]
All of REC's solar cell and wafer production plants in Norway were shut down permanently in 2011 and 2012 due to weak market conditions and prospects of significant negative cash flow.
On 25 October 2013, the solar division was split from the company and listed as a new company, Rec Solar ASA. It is headquartered in Singapore while traded on Oslo Stock Exchange. The remaining silicon division will from 1 December 2013 be headquartered in Washington state.
The predecessor of today's company was established in 1996 under the name Fornybar Energi AS. Today's company is a result of a fusion in September 2000 between ScanWafer AS, SolEnergy AS and Fornybar Energi AS. In 2002 REC ScanCell started production of multicrystalline solar cells in Narvik for the sister company REC ScanModule in Glava, Arvika. REC Wafer was at the time the world's largest producer of multicrystalline wafers with factories in Glomfjord and at Herøya.
Immediately after its IPO in 2006, the share price of the company soared, reaching a peak of NOK 262 in November 2007, corresponding to a market capitalization of NOK 174 billion. Based on this value, the company was at the time the largest wholly privately owned company in Norway.
In 2007, REC decided to build its new worldscale integrated solar manufacturing facility in Singapore, the world’s largest integrated solar manufacturing complex. When completed, the manufacturing complex was planned to incorporate wafer, cell and module production facilities, with a production capacity of up to 1.5 gigawatts (GW).
The development of this site was projected to enable REC’s ability to deliver solar products that can compete with traditional energy sources in the sunny areas of the world without government incentives.
In 2008 and 2009 two new factories for multicrystalling wafers were opened at Herøya.
In August 2008 REC made the decision to build a new facility for silicon manufacturing expansion in Bécancour, Quebec, Canada. Included in the decision is a 20-year power contract with Hydro-Québec for the delivery of electricity at a competitive industrial rate.
Crisis during 2008-2009
During 2008 and 2009, the company faced a crisis with falling income and increasing debt. As of May 2010, the market capitalization is down to 18 billion NOK. The large drop in value has been partially blamed on the financial crisis, which caused a near halving of the price of silicon wafers, as well as increasing costs of investments, in particular due to delays in opening a new factory in Moses Lake, Washington.
Crisis during 2011 and 2012
In addition due to the continued weak market conditions and prospects of significant negative cash flow, the board of directors announced in October that REC would permanently close down the production capacity at the oldest multicrystalline wafer plants at Herøya, the multicrystalline wafer plant in Glomfjord and the solar cell plant in Narvik. The remaining Norwegian plant, at Herøya, was closed down in 2012. Its wafer subsidiary, REC Wafer Norway AS, is planning to file for insolvency.
Proposed split into independent companies
In 2013, they announced a plan to separate REC Silicon and REC Solar into independent listed companies with head offices in the U.S. and Singapore, respectively. The rationale for the division is that it is increasingly demanding to grow and maintain a leading position in a fully vertically integrated business model, and only limited operational synergies between the Silicon and Solar divisions.
REC operates two US-based silicon materials production plants, employing about 800 staff in Moses Lake, Washington and Butte, Montana. At these plants, REC produces polysilicon and silane gas for the solar industry and the electronics industry. REC produced 21,405 MT of polysilicon in 2012, and targets a production of 20,000 MT polysilicon in 2013.
|Location||Country||Product||Capacity (MT)||Production (MT)|
|Moses Lake, Washington and Butte, Montana||USA||Polysilicon||-||-||60001||6500||170001||170001||5555||5780||6241||7023||13673|
1 Estimated production/capacity
REC produce multicrystalline solar cells and solar panels.
|Narvik||Norway||Multicrystalline cells||-||-||-||250||2501||2501||0 3|
|Tuas||Singapore||Multicrystalline cells||-||-||-||-||-||5301||650 1|
|Tuas||Singapore||Multicrystalline modules||-||-||-||-||-||5901||800 1|
1 Estimated production/capacity
2 Numbers not available
3 Plant closed down
REC has entered into a significant long-term agreement for supply of mono-crystalline silicon wafer to Suniva, Inc. Under the agreement, REC will until 2013 deliver wafers worth more than USD 300 million.
REC also entered into a significant long-term agreement for supply of mono-crystalline silicon wafers to China Sunergy Co. Ltd. Under the agreement, REC were to deliver wafers worth more than USD 400 million until 2015. It was structured as a take-or-pay contract with pre-determined prices and volumes for the entire contract period. However, in 2009, this contract became the cause of a legal battle between REC and China Sunergy. As spot prices for wafers fell dramatically in 2009, China Sunergy found itself bound to prices well below spot, prompting a stall in purchasing, leading REC to terminate the contract.
The shares are listed on the Photovoltaik Global 30 Index since the beginning of this stock index in 2009. During the past few years REC's stock price has gradually come down as a result of the demanding times in the solar industry due to overcapacity and heavy price pressure on solar products.
- "Annual Results 2010". Renewable Energy Corporation. Retrieved 10 February 2011.
- Renewable Energy Corporation ASA
- "REC Closing Norway Solar Wafer Plant on China Competition". Bloomberg. 24 Apr 2012. Retrieved 29 Jun 2012.
- Einar Takla , Fredrick Chr. Ekeseth (24 October 2013) Tore Torvund ny konsernsjef i Rec DN. Retrieved 25 October 2013 (Norwegian)
- "- Aldri vært på tale å gi opp". E24.no (in Norwegian). 13 April 2010. Retrieved 14 May 2010.
- "REC Norges største helprivate selskap". E24.no (in Norwegian). 2 February 2007. Retrieved 14 May 2010.
- Singapore Site of New 1.5 GW Solar Manufacturing Complex
- "REC has decided to build its future silicon material production assets in Bécancour". Government Of Quebec. 25 August 2008. Retrieved 2011-04-05.
- "Problemer i kø for Rec". Dagens Næringsliv (in Norwegian). 22 June 2009. Retrieved 14 May 2010.
- http://www.lni.wa.gov/news/2010/pr100330a.asp Washington State Department of Labor & Industries
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- Treloar, Stephen (14 August 2012). "REC ASA to File for Insolvency of Norway Solar Wafer Unit". Renewable Energy World. Bloomberg. Retrieved 18 August 2012.
- "REC to separate silicon, solar divisions", pv magazine 18. July 2013.
- FAQ's about the offering, REC Group. Retrieved 25 July 2013.
- REC - Press release
- http://cleantech.com/news/5147/china-sunergy-seeks-rec-wafer-injun China Sunergy seeks REC Wafer injunction extension