China and EU reach new solar power deal

Aug 02, 2013 12:00 AM

The EU and China have found a compromise in a row over dumping prices for Chinese solar power modules. Politicians and environmentalists are relieved, but the solar power industry is outraged.

EU Trade Commissioner Karel De Gucht had a reason to be happy following Monday's (29.07.2013) press conference in Brussels: after much wrangling, the EU and China had come to an agreement in the dispute over imports of cheap photovoltaic panels from China.

​​De Gucht is keeping specific details of the deal to himself for the time being, but further information was available from diplomatic circles: in future, Chinese solar modules will have to cost at least 0.56 euros ($0.74) per watt, and exports will be limited to a maximum of seven gigawatts capacity per year. In 2012, 13 gigawatts of Chinese solar module capacity were installed in the EU, although the EU Commission expects a slowdown in solar power expansion in Europe in 2013, predicting an increase of only 10 gigawatts.

De Gucht said he was confident that the agreement would stabilize the European solar market, that the drop of solar module prices in the EU can be stopped and the "damage that has arisen in the European industry by [cheap solar panel] dumping practices has been eliminated."

According to De Gucht, 70 percent of Chinese manufacturers have accepted the agreement. For the remaining 30 percent, the provisional anti-dumping tariffs of 47.6 percent will apply as of August 6. This voluntary commitment of the Chinese manufacturers will initially apply until the end of 2015. The compromise will now be discussed by the EU member states and must subsequently be approved by the EU Commission.

Relief and resistance

The government in Beijing has welcomed the agreement, calling it the result of a "pragmatic and flexible attitude" on both sides. German Economy Minister Philipp Rösler was also pleased. "A negotiated settlement is better than a conflict, which would be detrimental to economic relations," he said in Berlin.

Green party energy spokesman Hans-Josef Fell is also relieved by the compromise. "It's good that the punitive tariffs were stopped - it means the development of photovoltaic energy production in Europe can continue," he said. But he also criticized the fixing of minimum prices, because, he said, it would prevent further price reductions, and "impede stronger market growth, the energy transfer [to renewables], and climate protection."

The compromise was also welcomed by Stephan Singer, director of global energy policy at the World Wildlife Fund. "A trade war over clean, renewable energy is the last thing the world needs," he said.

But there was also strong criticism of the agreement - from the solar industry itself. The Alliance for Affordable Solar Energy (AFASE), supported by a number of European installers, has called on EU member states not to accept the conditions, since "any price rise is not sustainable for European installers." According to the alliance, since the introduction of preliminary tariffs in June, the solar power market has already shrunk considerably. "Price rises will only accelerate the negative development of the past few months," said Thorsten Preugschas, CEO of Soventix and chairman of AFASE.

EU ProSun, a solar industry initiative, also reacted with outrage, having already filed a complaint in Brussels a year ago against the Chinese dumping prices. Milan Nitzschke, spokesman for the German company SolarWorld and president of EU ProSun, condemned the compromise as illegal, calling it a scandal that they would take to the European Court of Justice in Luxembourg. "The EU Commission has given in to China to such an extent that it has moved outside the territory of European trade law," Nitzschke told the news agency DPA. He accused the EU of letting itself be blackmailed and dictated to by China. "It's a permanent power struggle, and the Chinese government is behaving like the Al Capone of world trade."

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