L R AS Published on Sunday 23 September 2018 - n° 248 - Categories:Europe, trade war
End of minimum price, bad signal to the storage industry, warns Total
Ending the minimum price on solar panels sends the wrong signal to the energy storage industry, warns Total Group
Arnaud Chaperon, Vice President of European Affairs at Total, said the abolition of the minimum price came as no surprise. However, the European Commission
should have re-examined the situation, as the global PV market has changed considerably since the renewal of the minimum price and because demand in Europe is driven more by auctions than by the price of the panels.
The Commission's inconsistency
Mr. Chaperon highlighted a much more serious issue, that of the inconsistency of the Commission on Fair Trade. This European position will affect other industries in the future, particularly storage.
In his view, the most serious is the image that Europe is giving at a time when Trump is protecting its industry in the United States, and India is raising customs duties, while Europe is opening itself up to the dumping of Chinese production. This gives a bad signal for the battery industry: China is not ahead of Europe in terms of storage technology, but it is already ahead of Europe in terms of production quantities. If we want to develop a battery industry in Europe, we have to do it on a fair basis. A. Chaperon adds: "How can we expect billions of euros to be invested in the development of batteries in Europe if we see, as is the case with solar energy, that at the first difficulty or whim the Commission gives up on applying commercial protection?
The Commission wants to develop European battery production, considering it to be strategic. The strong growth expected in electric vehicles means that Europe must be cautious in its strategic dependence on key components from China, Korea and other Asian competitors. This is important," says Chaperon, "because batteries account for nearly 40% of the cost of a car. If you don't make the battery, you immediately lose 40% of your value chain turnover.
Solar developers want the cheapest panels. Car manufacturers will also want the cheapest batteries. The cheap supply may well be dominated by imports from Asia.
The abolition of the minimum price should have been preceded by a review of the situation.
Returning to the minimum price debate, A. Chaperon presented similar arguments to Milan Nitzschke of Prosun: there had been no review despite the fact that the market had clearly changed over the last eighteen months. The revision of the solar policy in China has led to a drop in domestic demand and resulted in overcapacity. More products are destined for export. However, the United States and India have established tariffs on imports, increasing the volume to be shipped to Europe. This creates the conditions for dumping.
He acknowledged that reaching the target of 32% renewable energy in Europe requires that the price of panels be as low as possible. Removing tariffs reduces the price, but the price of panels is becoming less and less important in the final price of a solar power plant.
He adds that Europe is not standing up for its industry when there is no level playing field .
Chaperon sees a future battle with wind power
He takes up the arguments of Milan Nitzschke. According to him, demand in Europe is mainly linked to public tenders rather than to equipment prices. Regarding the rise of non-subsidised PV projects, he stated that the influence of the PMI was only minimal in terms of cost per kWh, which would not greatly affect the current demand from projects like Spain.
In the north of Germany or in France, in some regions, wind energy is competing with solar energy. Soon the price of the solar kWh will beat the price of the kWh of most wind projects. The wind industry will therefore claim in the future that solar is being subsidised by Chinese industries through dumping.
What are research laboratories in Europe for?
Mr Chaperon deplored the fact that the solar industry in Europe is now extremely weak. So what are research laboratories for if there is no industry to use them? The future will tell whether the end of the minimum price will increase demand in Europe. And what will be the effect of protective rights in India, which is a very price-sensitive country.
PV Tech of 18 September
Editor's note The fact that a prestigious group such as Total is publicly disagreeing profoundly with the official policy of the European Union indicates that the previous exchanges of views have beenCommissioners have not been listened to, making the photovoltaic activities of the group, and certainly of many other European manufacturers, more difficult.
It is difficult to say that these comments will have an echo, as a political decision of this importance cannot be changed quickly. Until then, industrial damage will occur.
