Receive free Solar power updates
We’ll send you a myFT Daily Digest email rounding up the latest Solar power news every morning.
One of the world’s leading solar developers has warned of the need to diversify supply chains for renewable power after it was hit by delays in shipping solar panels from China to the US.
Miguel Stilwell d’Andrade, chief executive of Portugal-based energy company EDP, said developers needed to “de-risk” their supply chains to help advance the shift to cleaner energy.
EU officials have said the growing use of solar power must not lead to a heightened dependence on China, echoing concerns in other sectors fomented by rising geopolitical tensions between Beijing and the west.
Chinese companies dominate global production of polysilicon, the main raw material for solar panels, but it is concentrated in Xinjiang, a region where the government is accused of abusing the human rights of Uyghurs and other Muslim residents.
EDP’s Madrid-based subsidiary had to delay the development of about 900MW of US solar farms until next year after the importation of products from supplier Longi was delayed by legislation aimed at curbing the use of forced labour in China.
As an alternative, Stilwell d’Andrade said EDP had started sourcing from suppliers in South Korea, Malaysia and Vietnam for its projects in the US. “I think it’s important that the supply chain is de-risked for any scenarios,” he said, adding that having a “competitive and affordable source of solar panels” was necessary to drive the energy transition.
The disruption to US imports of solar panels began after the Uyghur Forced Labor Prevention Act came into force in June 2022, which bans the import of all products linked to Xinjiang unless it is proved they are not made with forced labour.
Earlier this year, RWE, Germany’s biggest utility, said it had suffered delays because of the US ban, which it said threatened to hinder the development of green energy infrastructure. Beijing denies any abuses in Xinjiang.
In addition to polysilicon production, China has also become a world leader in the technology that turns the raw material into the ingots and wafers used to make solar cells, adding an extra layer to the country’s significance.
The EU was the world’s biggest solar power manufacturer in the early 2000s until it was usurped by a state-driven Chinese push into the sector.
In an effort to prevent a replay of this in the electric vehicle market, Brussels is launching an anti-subsidy investigation into Chinese electric cars.
“We have not forgotten how China’s unfair trade practices affected our solar industry,” Ursula von der Leyen, the European Commission’s president, said this month.
Brussels would like the EU to become a big solar production hub once more, but financial and practical obstacles stand in its way.
EDP, whose largest shareholder is the Chinese state’s China Three Gorges Corporation, has about 23GW of renewable energy installed around the world, enough to power millions of homes, including more than 2GW of solar energy.
It plans to install more than 4GW of renewables per year between this year and 2026, including significant investment in the US solar market.
Among its developments is an 882MW offshore wind farm off the Scottish coast, Moray West, through a joint venture between its renewable division and French company Engie.
The wind farm is among the projects that won subsidy contracts from the UK government last year at the record low price of £37.35 per MWh.
Swedish developer Vattenfall has since halted work on a development that had won a contract at that price, saying it was no longer viable because of a 40 per cent surge in costs.
Meanwhile, no offshore wind developers bid into the UK government’s latest round of contracts to support renewable energy, after warning that the maximum price on offer was too low.
Stilwell d’Andrade said the failure to attract offshore wind developers was “predictable” given rising costs across the industry, and that governments needed to respond.
“Naturally, you need to have higher energy prices to cover those additional costs [ . . . ] Or you’re going to have an auction, which is empty,” he said.
Longi declined to comment.
Read the full article here