l'Actualité du Solaire

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the contents :

THE WORLD SEEMS TO WANT TO REACT AGAINST CHINESE POLICY

Europe is developing a regulatory framework that may be able to protect domestic production.

To curb imports, US policy would need to be much stronger

Taiwan has started to react against its Chinese neighbour

India wants to make a place for itself in the global photovoltaic industry

How is China evolving in this context?

What is the effect on the availability of panels and what will be the orientation of prices in 2018?

PLEASE NOTE

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presentation of the texts

THE WORLD SEEMS TO WANT TO REACT AGAINST CHINESE POLICY

Europe is developing a regulatory framework that may be able to protect domestic production.

For a European, the Commission's decision on 13 December to define a new anti-dumping framework against Chinese imports of panels (like other products), is the basis for a new attitude, new legal possibilities and perhaps an industrial renewal. According to Milan Nitzschke, president of Eu Prosun and spokesman for the industry association AEGIS (The new European anti-dumping legislation will better protect European industrialists according to Milan Nitzschke), which defends the interests of European panel manufacturers, "these new rules provide greater legal certainty for anti-dumping measures."They allow a complete and up-to-date assessment of the measure to be taken in the light of the economy of the country of origin and the way in which free competition is distorted by the political authorities of that State. This is the consequence of the abandonment of the reference to the market economy that China had hoped to obtain in 2016, but which was not granted by the Europeans.

According to the Commission, "China will now have to prove the existence of a 'significant market distortion' between the selling price of a product and its production cost. It will then be able to set a price for this product by referring, for example, to the price of the good in its country of origin with a similar level of development or to relevant undistorted international costs and prices".

Thus, according to Milan Nitzschke, even if the Commission wants to eliminate minimum prices next year, it will be able to prevent it from doing so because the new European provisions make it possible to take measures against dumping.

Europeans are therefore very formalistic and legal, because it may be much harder to prove than we imagine, because how can we get the prices of the panels that are sold in China? In any case, this is the beginning of a reaction and it must be taken as such, because the European PV industry will only be able to wake up and develop if the internal market is dynamic, which is still to be demonstrated?

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In order to stem imports, American policy should be much stronger

Quite different is the US policy to stem the flood of Chinese PV imports. President Trump has not yet taken a decision (he has until 26 January to do so), but the limited information available suggests a violent reaction. According to a confidential White House memo (D. Trump would be strongly urged to take strong trade sanctions), strong trade sanctions would be considered against foreign manufacturers of solar panels. According to the note, the measures would be more severe than those called for by Suniva and SolarWorld.

While this note may be intoxicating, the report of the US International Trade Commission (USITC) provides a legal basis for the introduction of severe sanctions (USITC report urges president to impose tough sanctions on solar imports): China is accused of putting in place government subsidies and expanding production beyond what it could use in the country. The USITC accuses China of circumventing the rules of the World Trade Organisation. The US is forced to observe "unforeseen developments" because of China's attitude, making it easier for other countries to be flooded with low-priced dumped products. These "unforeseen developments" give the US the right to impose severe sanctions on imports of solar panels.

This difference in approach between Europe and the United States reflects the political weakness of the latter, and its conviction that it is right to do so! It reflects a balance of power vis-à-vis China. Indeed, and on the occasion of this arm wrestling, the Americans are going to make China pay for the customs measures on silicon that effectively prohibit manufacturers' sales in the only country that has created a flourishing photovoltaic industry. This means that the commercial battle which began in 2017 still has good prospects in 2018.

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Taiwan has begun to react against its Chinese neighbour

While Europe and the United States have begun their counter-offensive against China, other countries are launching it too. For the record, the Taiwanese, who used to live in harmony with Chinese manufacturers, have for the past eighteen months been under pressure to reduce prices, to make the island's companies loss-making, and thus to make them disappear. The Chinese are now resuming their offensive to ruin the Taiwanese cell industry by offering expensive wafers and buying cells at low prices. Some Taiwanese companies have begun to react by regrouping at the end of 2017 to form the world's fifth largest cell manufacturing group with the aim of reducing prices, but how can they have a say in negotiations if they don't control supplies upstream and the manufacture of panels downstream? This is why some people are starting, a little late, in the manufacture of panels, but it is still marginal.

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India wants to make a place for itself in the world photovoltaic industry

The government is launching an ambitious programme of panel installations to reduce energy imports and reduce pollution in cities. However, it is the Chinese, with their production capacity, who pull the chestnuts out of the fire, ensuring 85% of imports: They thus supply the panels for more than two thirds of PV installations, since out of the 7 GW installed during the first nine months of the calendar year, the Indians produced only 2 to 3 GW of panels (this approximation is indicative of the lack of statistics in India and the insufficient Indian competitiveness. Imports should have further reduced these figures). The Chinese have thus taken advantage of the installation programme in India: imports have risen from 1.3 GW during the fiscal year 2014-15, to more than 8 GW this year. The Indian industry does not benefit from PV installations. Moreover, using the pretext of sustained global demand in July-August, the Chinese have suspended deliveries or increased their prices in defiance of the contracts signed. Therefore, after launching PV installations, the Indian government is now embarking on building an industry, being ready to invest $1.7 billion to stimulate it (India is developing a $1.7 billion plan to produce photovoltaic panels): it is a question of developing the embryonic production of cells and panels, but also and above all of creating a silicon and wafer industry to constitute a complete sector and to be able to free itself from imports of components. To do this, it is launching a call for tenders, promising subsidies to producers, abolishing the entry duties on production machinery, and envisages the introduction of a 7.5% tax on imported products. The Indian manufacturers demand such customs protection to have the means to set up efficient production chains...

As there is no doubt about India's desire to develop and migrate to solar energy (10 GW of floating power stations are envisaged), it must take the means to grow its industry. This is not easy because the World Trade Organisation is watching: the United States has had India condemned for its practices of national preference... Nevertheless, this will to industrialise will be put in place. A new front will emerge against China's desire for hegemony. It is necessary to wait two or three years for it to appear clearly, but it wants to emerge.

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How is China evolving in this context?

From then on, all eyes turn to China at the beginning of this year. It holds the key to the worldwide growth (or decline) of photovoltaic installations. Its market share has grown steadily in recent years, rising from 26% in 2015, to 38% in 2016, and probably to 50% in 2017: It is already certain that the 50 GW level installed in 2017 in the Middle Kingdom will be surpassed, as the authorities have announced that installations at the end of November reached 48.4 GW, partly thanks to the new solar power plant.The decentralised installations represent 17.2 GW over these 11 months and are increasing rapidly (on the last day of the year, 29 December, 500 MW of decentralised installations were installed). Will we reach 54 GW as some have recently envisaged? Would this level be exceeded by 31 December! It is commonly accepted that global installations would reach 100 to 108 GW. China would thus be 50% of the world!

Consequently, there are two kinds of photovoltaic industries in China, one made up of second-tier companies and large companies working solely for the domestic market and using mainly polysilicon. The other is able to sell on international markets; it consists of the top ten companies widely known in the world and uses both poly and monosilicon. The former lives at the pace of domestic installations, the latter depends on the main world markets, including the United States and Europe.

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What effect will this have on the availability of panels and what will be the price trend in 2018?

This means that if the United States closed its market to Chinese imports, large Chinese companies would partly turn to their domestic market or to other markets, while the other part of the industry would not be affected by these measures! This also means that the size of the Chinese domestic market allows it to safeguard the profitability of companies: they would only be marginally affected. Finally, this means that a dynamic has been set in motion in China to the benefit of photovoltaic installations. For the façade, the Beijing government pretends to lead the installation movement, but the pace, much faster than the plan allows, shows that there is a need and a will to develop this energy to the detriment of coal and pollution in urban centres. Consequently, a new significant growth in Chinese installations must be envisaged in 2018 (after the doubling of 2016 over 2015, then the 50% increase in 2017 over 2016). The IHS' high hypothesis, which envisages 60 GW installed in the country in 2018, appears to be a low limit of what will be installed in the country in 2018.. (NDLR Note that these figures are approximate and indicate a trend, as there is no statistician's unit on them)

To frighten, several commentators (IHS, Bloomberg NEF, ...) estimate that there will not be enough silicon available to exceed the 110 GW that could be produced in 2018. It is true that current silicon supplies are apparently tight. At the end of November, the government increased customs duties on silicon imported from South Korea, contributing to this shortage (China raises tariffs on Korean silicon), and raising the average price in China. Secondly, cutting ingots with diamond creates silicon dust that can be recycled, unlike cutting with mud where the dust is unusable (diamond cutting reduces silicon consumption by 17% according to BNEF). Finally, manufacturers have begun construction of several silicon production units in western and southwestern China (Silicon manufacturers moving west and south to China). Some of them will be commissioned in mid-2018. Silicon supply is therefore expected to increase in the second half of 2018. With these commissionings, the currently high price of silicon could then (perhaps) ease due to a certain abundance. Another factor will be the installation of new production units in poorer regions of China, where the price of a kilowatt-hour of electricity is five to ten times cheaper. A mechanical drop in the price of panels is therefore to be expected from the second half of the year, driven by silicon.

And for the first semester? The uncertainty is greater because it depends on American measures: high customs duties or quotas would limit sales on the American market. The available production of panels would go to Europe or other parts of the world: prices could then fall. An absence of American measures (unlikely) would make global supply difficult because installations in China will be particularly important in the first half of the year due to the end of favourable purchase tariffs on June 30, 2018.

Another factor to be taken into account is the introduction or absence of the introduction of an import tax in India. 8 GW are involved. This volume will be absorbed by India or will be available for other markets .

Thus, if the orientation in price and volume of the world panel market is uncertain at the beginning of the year, we can envisage a second part of the year more favourable in terms of supply and prices... By 2019 and especially 2020, the Chinese silicon manufacturers will have commissioned their production units. For their part, the American and Indian manufacturers will have regained part of their dynamism.

As for Europe, it could well surprise in 2018 by the new PV installations carried out without subsidies, and with electricity sales by mutual agreement. This is illustrated in Spain, where several hundred megawatts are awaiting building permits. The electricity produced will be sold on the market. In the United Kingdom, where the first power plants without subsidies have just been commissioned in the second half of 2017. These precursors will certainly be followed by others either in these two countries or in others.In 2017, in the United Kingdom, there was the first day when coal-fired power stations had to be completely shut down and 86% of the days of the year when RE produced more than coal-fired power stations (Emergence of RE in the UK in 2017). In France, there will also be the additional GW tender announced by the French minister, which will be awarded this year.

Come on! The time of the brioche is near!

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TO NOTE

- Ranking of solar electricity producers in France in MW held : an interesting presentation of the various solar power producers according to the number of megawatts-peak held in majority on 31 October 2017, has been established on a declarative basis.

- Exosun is taken over by Arcelor Mittal

- Results of the solar route experiment one year later

- Interview with Mark Widmar, CEO of First Solar, conducted by PV MagazineThe American market is upset by the 201 case. The demand for panels is strong

- How to ensure electricity consumption with RE in California? By using land unsuitable for agriculture and safeguarding nature reserves, RE production would be 13 times higher than consumption.

- What is the status of the industrial activity of dismantling lithium-ion batteries?There is not yet a recycling industry for used lithium-ion batteries. It seems that a large proportion of batteries have little or no economic value from a recycling point of view -

- BP oil tanker returns to green energy