Trade Roadblocks hinder EU Solar Progress
The war in Ukraine has precipitated a move away from European oil & gas imports from Russia and as a result more emphasis is being placed on solar power. As reported in an excellent article in the Financial Times this week (authors: Yuan Yang, Alice Hancock and Laura Pitel) – the EU is looking to make solar power the largest energy source in the region by 2030. This will mean increasing solar capacity by three-fold in the EU in just seven years. This gives rise to concerns about dependence on China which supplies around 75% of Europe’s solar power equipment requirements including polysilicon, silicon wafers, PV cells and PV modules. (Yang, Hancock, & Pitel, 2023)
Long story short, the EU is accused of dropping the ball on solar investments for too long and for creating trade disputes with China through imposing anti-dumping laws – and adding 50% onto the price of Chinese solar equipment imports. The resulting price rises made it harder for the EU’s domestic industry to build solar capacity.
The ambition as set in the law passed in mid-March – the “Net Zero Industry Act” (NZIA) sets a goal of the EU meeting at least 40% of its power generation requirements. This has been met with a level of scepticism with the chief executive of Lightsource bp – the EU’s largest solar developers – Kareen Boutonnat, expressing concern that this rush to solar could result in too high a power price, and effectively give the industry a bad name.
The situation typifies a problem – the West doesn’t want to import goods that are in any way tainted by human rights abuses (much polysilicon is produced in Xingjiang), and we are concerned about Chinese dominance – however the EU countries cannot build fast enough to meet legislated targets without continuing to rely on the world’s solar giant. The global economy has been built over decades and it is not easy to make an about turn in the space of a few years.