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Power play


Although progress and successes have at times been slow and discouraging to advocates of alternative energy sources, experts, analysts and metals makers say the field continues to open up with opportunity for steel, aluminum and other products.

The solar power industry has become a reliable and scalable consumer of structural and other steel products, and in 2016 steel mills could stake a bigger claim during a brief yet fast-paced uptick in solar demand.

“There are a wide variety of steel products used in solar energy projects, whether in-line galvanized mechanical tube, hollow structural sections or roll-formed profiles,” Wheatland Tube Co. general manager David Devine said. “Utility-scale solar projects have required vast amounts of steel products.”

In particular, “structural tubing is used for ground posts for fixed systems, the racking of fixed systems and torque tubes of tracking systems,” he said.

Solar technology makes use of the daily incoming solar energy, the so-called “global radiation.” Both heat and power from the radiation can be harnessed. Today energy providers can collect the sun’s energy with two different methods: with photovoltaic cells or with collectors heated by the sun. Solar power plants require various long products.

While steel mills across the country watch their margins shrink on the back of stalling U.S. oil production, solar energy is silently preparing for a capacity revolution. According to the U.S. Energy Information Administration, utility-scale solar power generation will average 89 gigawatt hours per day in 2016. That means solar capacity will have doubled between the end of 2014 and the end of the 2016.

Metals products for towers include steel for flanges, bars for bolts, merchant bars and sections for cable ducts, ladders and platforms, and galvanized sections for transformers, control panels and cooling systems.

Stainless steel products will also play a key role.

“Fortunately, nature is generous. It provides liberal amounts of energy. The sun is just one source. The challenge lies in capturing its radiation and transforming, transporting and storing the energy. As in many areas of energy transformation and use, stainless steel plays a key role in solar technology – and has the potential to grow further,” said Ju¨rgen Fechter, longtime stainless steel executive and former chairman, market development committee, at the International Stainless Steel Forum.

“Wherever technical solutions are required for key tasks in our modern societies – food production, health care, drinking water preparation–stainless steel is now a normal material. Use of solar energy can now be added to the list,” he said.

With solar on the upswing, steel expertise is filtering into the supply chain for photovoltaic panels and their racking and mounting systems from other industries, such as construction and automotive.

“The solar industry really is a construction industry,” according to Aaron Faust, vice president of business development and co-founder of Applied Energy Technologies (AET). “You’re building something. It has to survive. Those frames have to hold up against their load plus survive weather conditions.”

Founded in 2009, Clinton Township, Mich.-based AET supplies solar mounting and racking products across the country. Faust, along with his co-founders, entered the solar arena from automotive racking manufacturing.

“With the overall path we took, solar is an adaptation from what we were already doing in automotive,” he said. “The engineering mindset going into this industry was very similar to what we had in the auto industry.”

As in the auto industry, solar steel has faced challengers, namely aluminum.

“An aluminum rack may include some features that are attractive to customers,” AET vice president of engineering and co-founder John Klinkman said. “But we have seen a lot of aluminum-rack suppliers also come out with galvanized steel products. That’s definitely something that has changed.”

Devine believes in steel’s advantage in the solar sector. “Steel has become a common off-the-shelf product in a wide variety of profiles,” he said. “Many other materials rely on proprietary shapes that restrict availability to a limited number of sources and require individual engineering and testing on those shapes to understand their load-carrying capabilities.”

Solar project managers know steel and rely on the material’s consistent performance on utility-sized installations. “In-line galvanized steel products have been proven to be the most effective products due to their ability to meet strict production specifications while providing high corrosion resistance,” Devine said.

AET sees the same trend with its customers. “You know what you are getting with steel, and the customers know what they are getting,” Klinkman said. “Despite new trends, galvanized steel parts keep coming back.”

Of course, like most steel products, price pressure has had as much to do with the commodity’s rise as the material itself.

“During our first four years, we sold predominantly stainless products,” Faust said. “In the last three years, galvanized steel has taken the lion’s share of our products. For a long time, it was the perfect storm—stainless could compete with aluminum and galvanized. But margin has been squeezed so tight across the board. Prices are driving everything now.”

When racking companies consider steel and steel tubing suppliers similar to Sharon, Pa.-based Wheatland, they look ahead at ways they can optimize the supply chain feeding into solar.

“Two things that will define next year are the availability of steel and the capacity of companies to process it,” Faust said. “There’s not much concern over availability, but the market could face some limitations with the market concentrated on certain forms.”

That is why AET decided to concentrate on more standardization in its products—repeatable performance from products that can be duplicated. “We are trying to move toward more common sections for construction,” Klinkman said. “Steel allows for products that are still unique, but have some common sections that make logistics and supply chain more cost effective.”

By market indications, they will need that robust supply chain. Solar installations are accelerating ahead of December 2016, when the federal solar investment tax credit is set to expire.

“Solar installers are pushing to get projects in and up and running by the end of next year,” Faust said. “There is some positive news that the tax credit may be extended, but in the meantime a lot of plans are being made. That means huge demand for galvanized steel products in the next year.”

Despite that positive news, 2016 could still remain a small window for a solar industry expressly hungry for steel—a hunger that steel producers can satisfy as they weather downturns across other industries.

“While most in the industry do not think that the investment tax credit will go away completely at the end of 2016, there is a realization that current levels will be significantly reduced,” Devine said. “Following the expiration of the solar (credit) at the end of 2016, the growth previously expected will be curtailed dramatically, but we do expect there to remain some demand within the solar industry.”

Structural tubing producers have more opportunities in commercial solar energy beyond standard mounting products, according to a global manufacturer.

“Trackers—that’s really where the growth is,” GameChange Racking LLC chief executive officer Andrew Barron Worden told AMM. The New York-based company offers a tracking system using square and round steel tubes and patented bearings that follows the sun’s path throughout the day, increasing the panel’s efficiency.

“A tracker follows the sun. The panels on the tube twist back and forth. ... A single-axis tracker is the most cost-effective way, which is what we offer,” he said.

Worden expects his company to consume 30,000 to 40,000 tons of steel next year¬—90 percent of it tubing—manufacturing the single-axis tracker. “As a vendor, I would buy as much as (tube mills) can make” in 4- and 5-inch diameters, he said. When it comes to diameter, “the bigger, the better.”

However, the executive has faced challenges in securing supply. “There’s a constraint on the manufacturing side,” Worden said. “It’s frustrating that people cannot provide us with that much product. This is a real opportunity for fabricators to put out larger sizes.”

For tracking products, pre-galvanized welded tube provides the most advantage, especially if the mill is able to punch holes while rolling the product.

“Making black tube and dipping it never works,” Worden said. “Post-dipping never stacks up for solar. A real value-add for solar systems is the ability to punch holes while forming the square before fabrication. That’s what we’re looking for—the ability to roll great pre-fabricated stock with the ability to regalvanize.”

With solar use projected to grow beyond the possible expiration of federal investment tax credits, installation options such as tracking systems and other mounting products could prove a powerful niche market for steel tubing.

“Solar costs are dropping,” Worden said. “The (expiration of the credits) will slow things down for a little bit, but costs will keep driving down. Steel is so cheap, and there’s a clear demand on our side into the next year.”

In December solar energy companies got help from Congress and President Obama with the approval of billions of dollars in tax credits, including an extension of the solar investment tax credit (ITC).

“It is all positive,” Faust said. “The anticipated ITC cliff yielded a lot of uncertainty in the entire industry, leaving everyone to wonder who would be around in 2017.”

The 30-percent solar ITC, originally slated to end Jan. 1, 2017, now applies to projects that start construction before the end of 2019. The rate tapers off in the following years to a final 10-percent rate for projects constructed and placed in service before 2024.

Clinton Township, Mich.-based solar racking company AET predicts that the tax credit will support a continued rise in utility-scale installations—and a perceptible uptick in steel demand. “We expect a steadier growth rate, similar to the last two years,” Faust said. “And yes, that will translate into steel demand.”

Solar is a powerful niche for steel products such as structural tubing. The U.S. Energy Information Agency projected that utility-scale solar power generation would average 89 gigawatt hours per day in 2016, more than double the level at the end of 2014.

“It still remains to be seen how (the tax credit extension) will affect 2016,” Faust said. “It does take some pressure off our customers, but a lot of the planned projects in 2016 should still happen. We now have the latitude to consider additional avenues that otherwise may have been deemed too risky.”

A number of metals companies have taken the lead in pursuing the opportunities presented by alternative energy sources.

Falcon Steel has released a white paper to help power delivery providers understand the relative advantages of lattice towers and steel poles used in transmission support structures. A leading producer of steel structures for power delivery systems, Haltom City, Texas-based Falcon Steel is the only manufacturer and fabricator of both lattice towers and steel poles based in the United States.

Titled, “The Lattice Tower or the Steel Pole: A Compatibility Comparison,” the white paper covers three core areas where the lattice tower and steel pole fabrication process differs.

The paper also reviews how variations affect cost differences between the two types of structures, as well as when one structure might be more appropriate and cost-effective than the other.

“Lattice towers are a decades-old solution, and steel poles are a much newer option that has grown exponentially over the past couple of decades,” said Claus Sutor, executive vice president, engineering and marketing for Falcon Steel. “Both options have advantages and disadvantages, and aren’t necessarily interchangeable. Our goal is to help providers maximize the benefits of each.”

Albertville, Minn.-based Fraser Steel is one of the first tubular steel manufactures in America to develop prototypes for heliostat chassis used in utility-scale solar power plants. Its tubular chassis form the backbone of the next generation of heliostat, trough, dish and photovoltaic supporting structures. They are in demand by solar power tower plants around the world.

Fraser Steel offers large-scale solar energy producers a complete chassis solution. From designing heliostat prototypes to producing finished runs of 100,000 or more, Fraser manages every step in the production process. This one-stop approach guarantees maximum efficiency and accountability. It also keeps costs competitive.

Fraser is experienced in global logistics, so getting heliostat structures to remote locations is second nature.

Structures are formed from 8500 or 8513 mild or stainless steel, or aluminum. Once fabricated, they are painted, plated or galvanized in one Fraser’s ultra-efficient production cells.

Chicago-based JMC Steel Group companies produce a wide range of products for the solar energy industry.

Galvanized steel pipe and HSS tubing provide the support structure and framing systems that hold solar panels; galvanized mechanical tubing (round, square and rectangular) is used to make solar rack structures; and steel fence framework guards the perimeter of facilities to keep out unwanted visitors.

HSS has greater strength-to-weight ratios than other steel shapes, so less steel is needed by weight to do the job. Less weight means less cost, saving money on transportation, handling and erection costs. HSS also provides a cost-competitive alternative to other types of metal.

JMC Steel Group is the leading manufacturer of structural steel tube in North America. Its round, square and rectangular steel tubing is used throughout the solar industry as support piers for “ground-mounted” structures. JMC also uses tubing to manufacture “screw piles”. This enables JMC to provide complete solutions that meet varying soil conditions and requirements.

JMC has the largest size range of structural tubing in North America. Larger sizes are widely used for carport applications throughout the solar industry. In addition, JMC offers fabrication services that help reduce labor costs in the field.

JMC also specializes in square tubing. Whether it’s for a fixed-tilt or solar tracking system, JMC’s cross members are available in a variety of sizes and gauges.

According to an ArcelorMittal report, “From the perspective of current technology, it has become clear that the future supply of national and international energy is only possible with a mix of fossil, nuclear and renewable energy sources. The steel industry has therefore a great responsibility to contribute to sustainable development.

“Wind energy requires specific and reliable foundation solutions adapted to high loads and dynamics but also reducing the total environmental footprint of the foundation.”

ArcelorMittal, based in Luxembourg, offers and delivers: HP bearing piles, well suited to use in cases where very soft clay or loose sand and gravel is present in the soil; rebar, available in every country with national certification in a wide range; SBQ (special bar quality) and threaded bars, available in carbon

grades, low and high alloy grades in various diameters; and sections and merchant bars, for transition pieces.

Lattice tower wind turbines seemed to have been almost crowded out by the tubular tower, but they have experienced a renaissance in recent years, ArcelorMittal said.

They are ecologically attractive, being the most cost-effective solution to reach the the greatest heights. Especially for on-shore applications, reaching great heights allows increased wind speeds to be utilized increasing efficiency and turbine power. Additionally, wind shear decreases with height, thus fatigue stresses are reduced as well.

The design provides a reduced frontal area, optical transparency, and reduced weight in combination with high bending stiffness.

The low-cost structure, reduced foundations combined with a corrosion protection through galvanizing makes it the best investment over the long-term, ArcelorMittal said.

Lattice towers are less expensive; increase power with increased wind speed through greater height; are lighter; use less foundations; are easier to deliver in restricted areas (hills, forest); are corrosion protected by galvanizing; create the easier logistics; and have the lowest life cycle costs for sustainable energy production.

A tubular tower is made of a cylindrical steel tube with diameters and wall thicknesses varying according to power. In addition to flat products delivered by ArcelorMittal, Long Carbon Europe delivers specific long products extending from the nacelle down to the tower base as well as steel for connecting the different tubes of each tower.

The demand from the solar industry for aluminum is unlikely to become a significant driver of growth in aluminum demand, some suppliers to the solar industry told AMM.

Despite SolarCity Corp.’s development of a “GigaFactory” that will manufacture solar panels in Buffalo, N.Y., aluminum industry participants remain unmoved by tepid demand from the industry thus far.

“It’s certainly a stagnant, nongrowth market,” Scott Chapman, vice president of sales and marketing with Bradford, Ontario-based Spectra Aluminum Products, told AMM.

According to Chapman, solar panels represent only 10 percent of solar-related production in his facility, the remaining portion accounted for by racking and mounting components to install solar panels on buildings. Chapman describes the market for these components as “at a saturation point.”

The majority of aluminum used for solar panels comes from foreign sources, Chapman said, adding that he is skeptical of any claims that domestic producers will be contracted to provide materials for companies like SolarCity.

“(SolarCity) is obviously seeing something in the solar industry that we’re not,” said Chapman.

“Solar is uneconomical in its current state,” an extruder source told AMM, adding that his company produced only racking and mounting components for solar panels, while the panels themselves were manufactured overseas. According to the extruder, demand for solar is being fueled primarily by government tax incentives.

“It’s a pretty sizable portion (of our business), but if we lost it all it wouldn’t really hurt us,” he said.

“I haven’t heard anything up or down,” an aluminum billet producer who supplies extruders with solar industry customers told AMM.

Despite the attitude of market participants, some see an opportunity in growing demand for the solar mounting systems.

“There are many manufacturers of mounting systems across the country that tend to purchase from domestic extruders for quality, engineering, delivery/logistics, and project management support,” Jeff Henderson, director of operations for the Aluminum Extruders Council, told AMM.

Mounting systems are engineered to be unique to the job they are used on, and are often purchased on a project-by-project basis, with both factors causing companies to favor domestic extruders, Henderson said.

According to Aluminum Association statistics, the volume of extrusions shipped for solar energy applications in the United States has been climbing since 2010, totaling 40.9 million pounds in 2014, up 5.3 percent from 38.8 million pounds the previous year.

A total of 8.3 million pounds of extrusion were shipped for solar usage for the first quarter 2015, up 25.6 percent from 6.6 million pounds for the same period last year, the Aluminum Association said, adding that statistics on shipments for solar usage were not compiled until 2010.

The GigaFactory, which will span 1 million square feet, is expected to be online later this year, with a full ramp-up of 10,000 solar panels per day by early 2017, a spokeswoman with SolarCity confirmed to AMM. She declined to discuss the Buffalo facility’s specific needs for aluminum supplies.

“When we are ready to begin the procurement process, we will need gases, chemicals, extrusion, stamping and other specialty formulations,” Kady Cooper, communications director for SolarCity, said. 

San Mateo, Calif.-based SolarCity, the largest solar energy provider in the United States, will reportedly spend $5 billion in the next decade on the development and ramp-up of the Buffalo facility, while New York State will invest an additional $750 million, according to Gov. Andrew Cuomo’s office.

The Buffalo Niagara Partnership, the region’s economic development organization, claims that SolarCity will be utilizing local suppliers for its needs “as much as possible.”

“SolarCity will have an enormous impact on our work force and economy,” Dottie Gallagher-Cohen, president and chief executive officer of the Buffalo Niagara Partnership, said in a statement.

Available solar energy has shot up over the past decade, according to a 2015 statement from the Solar Energy Industries Association (SEIA).

By the end of 2014, there were 20,000 megawatts of solar energy installed in the United States, up from 500 megawatts in 2004, the SEIA said.

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