We published this week ICB’s annual Top 40 Power Players within the global chemical industry and Dow Chemical CEO and presidentAndrew Liveris was chosen as the top power player for 2010.
This reminds me of my attendance at Dow’s annual investor day last monthwhere a lot of the business presentations I saw targets clean technology such as Dow’s solar shingle, epoxy resins in wind energy, watertreatment, energy storage, technologies in green building trends, greenpolyethylene….During the event, Liveris said they expect the cleantech energy sector opportunity to be more than $2 trillion by 2020.
We toured their POWERHOUSE solar shingle pilot facility in Midland, Michigan, where we were able to ask somequestions such as what type of materials/chemicals are being used forthe product, how much it will cost per unit, how many units will be sold next year, etc. Unfortunately, a lot of the information are proprietary but Dow did say that the shingles will use copper indium galliumdiselenide solar modules, or CIGS, made by Global Solar Energy Inc. CIGS cells typically are more efficient at turning sunlight into electricity than traditional polysilicon cells.
Dow also expects a $5bn market opportunity for chemicals andmaterials used within the solar industry and the company expects to earn more than $1bn from its solar shingles by 2015. The solar shingles aregoing to be commercially launched next year. Dow said it continuesproduct testing in various climate conditions.
During that time, Dow announced that the solar shingles received product safety certification from Underwriters Laboratories (UL). Over 50 individual tests were conducted to assess the safety ofthe DOW™ POWERHOUSE™ Solar Shingles against building code standards,including wind and fire resistance, and electrical code requirements,such as proper wiring and photovoltaic (PV) connections.
We were able to also tour one of the model zero-energy homes in Michigan, which uses not only the solar shingles but also severalDow Chemical products such as heat transfer fluids, polyurethanes,coatings, adhesives, sealants and other energy-saving buildingconstruction products. Market opportunity just for low/zero-VOC coatings alone is around $800m and Dow expects to gain sales of more than $160min this market by 2015.
Speaking of heat transfer fluids, Dow said it achieved record supply of heat transfer fluids this year mostly for solar power applications. To date, Dow supplied to 14 large Concentrating Solar Power (CSP) plants in Spain and the United States, with a total capacity of more than 700 MW. The fluid collectsthe heat energy from the solar panels and transports it to a powerstation where it is used to produce steam, which drives turbines thatgenerate electricity.
When it comes to wind energy, Dow’s venture capital business made aminority equity investment this year in wind turbine blade manufacturer Blade Dynamics Ltd. The company plans to establish and operate a new manufacturing facility in New Orleans. In September, Dow formed a collaboration with Astraeus Wind Energy Inc. (AWE) and MAG Industrial AutomationSystems (MAG) to develop "material-enabled automated manufacturingsolutions" focused on improving and enhancing the manufacture of windturbine blade components, and finished blades, for the wind industry.
Chemically-speaking, the liquid epoxy resins (LER) market, of which Dow is a major producer, is actually benefiting from the growth within the wind energy market.According to Dow, new epoxy resins could lighten wind turbines andincrease energy efficiency.
Dow has been very active as well this year in energy storage projects, where its joint venture company Dow Kokam broke ground in June for a new lithium ion batteries production facility in Midland. Dow also announced at their Investor Day its plans to form a new business focusing on manufacturing and selling materials for advanced batteries.
The business will start selling raw materials and associatedtechnology in 2012 initially focusing on rechargeable lithium ionbatteries for the automotive market. Dow did not disclose the specifictype of materials they will sell to battery manufacturers. As far as myresearch goes. some of the major materials used in automotive lithiumion batteries include lithium ion phosphate, lithium metal oxides,polymeric separators, anode materials such as graphites, andelectrolytes, etc.
A Dow official said the company is also looking to invest in lithiumprojects in China to capitalize on the growing energy storage marketpotential in the region. Government clean technology subsidies andenvironmental policies in China are expected to drive increasing demandfor electric vehicles, according to the official.
Dow Chemical estimates the global energy storage industry to growfrom the current $24bn to $74bn by 2020, with the largest growthopportunity in the automotive market. For lithium ion battery materials, the market opportunity is said to be around $15bn.
Speaking of China, Dow’s Electronic Materials business unit announced at the event its plans to construct a new manufacturing facility in Zhangjiagang site in the province of Jiangsu, to meet the growingmaterial demand to serve printed circuit board (PCB), electronic andindustrial finishing, and photovoltaic (PV) markets in Asia.Construction is expected to begin in late 2010, with productionanticipated to beginning in late 2011.
Finally, I was able to speak to Dow’s vice president ofsustainability and EHS (Environnmental, Health and Safety) Neil Hawkinsat the event. He noted continued strong demand for chemicals and otherclean technology materials in the US despite regulatory uncertainty inthe implementation of renewable energy policies from the newly-electedUS law makers.
Hawkins also briefly described some of Dow Chemical’s sustainabilityaccomplishments this year such as the innovative hydrogen peroxide topropylene oxide (HPPO) process jointly developed with BASF aside from the solar shingleproduct. (I will actually post about HPPO in the next few days mostlyfrom my interview with Evonik).
Dow noted that sales from products with sustainable chemistryperformance increased from 1.7% in 2008 to 3.4% in 2009. In terms oftheir won greenhouse gas and energy efficiency goals by 2015, thecompany said it plans to reduce its GHG intensity by 2.5%/year andreduce their energy intensity by 25% from 2005 baseline. Unfortunately,according to Hawkins, it is not easy for the company to quickly reducetheir global manufacturing’s GHG and energy intensities because offrequent adjustments from mergers and acquisitions activities such asthe recent acquisition of Rohm and Haas.