European Commission slaps anti-dumping duties on SolarPanels

[Irbis]

EU imposes levies on Chinese solar panels

Imports of Chinese solar panels to Europe will be subject to anti-dumping duties following a European Commission ruling.

The European Commission has imposed anti-dumping duties on imports of Chinese solar panels, defying German-led opposition and dire warnings from Beijing the move could spark a trade war.

"Today, the European Commission has decided unanimously to impose (punitive) tariffs" on Chinese solar panels, after finding they were being sold at up to 88 per cent below cost in the European market, EU Trade Commissioner Karel De Gucht said.

De Gucht said it "is clear that the dumping" is harming the European solar panel industry, with 25,000 jobs threatened as Chinese companies take 80 per cent of the market.

Accordingly, the Commission would levy an initial average tariff of 11.8 per cent from June 6, rising to 47.6 per cent on August 6 in the absence of negotiations based on a Chinese commitment to address the problem.

"I want a fair solution with China," De Gucht said, adding that Tuesday's decision opened the way to talks, if Beijing wanted them.

"The ball is now in China's court."

The commissioner insisted that the measures were not protectionist but rather within the EU's rights under international trade law to protect its interests.

China has solar panel production capacity equal to 150 per cent of world demand, he said, and that meant they were manufacturing too much.

The tariffs are provisional for six months, with EU member states having a vote in December on whether to make them permanent or not.

In recent weeks Germany has led growing opposition to the move, winning the support of 17 other member nations including Britain but not France.

The commission's decision is its single most important anti-dumping action, covering a market worth 21 billion euros ($A28.32 billion), and follows similar steps in the United States.

Why is bolded figure (88%) important? Let's see what Peter Terium, CEO of RWE, one of largest European energy producers, has to say in this link:

SPIEGEL: Now RWE wants to invest in solar. Your predecessor Grossmann still rails that generating solar electricity in Germany makes about as much sense as "growing pineapples in Alaska." Why are you entering the pineapple farming business?

Terium: Because the government subsidizes growing pineapples in Germany. As a taxpayer, I can be upset about the fact that it's a waste of money. Spain has twice as many hours of sunshine as Germany. For the same amount of invested capital, twice as much energy could be generated there.

German subsidies, Chinese dumping prices, and yet, solar energy is still considered as sensible as growing pineapples in Alaska. But it surely must be good for evironment, yes?

SPIEGEL: But the nuclear industry has been claiming for years that the lights will go out if plants are shut down. And yet nothing has happened so far. Why should we take this doomsday scenario seriously now?

Terium: The warnings are coming from the Federal Network Agency (ed's note: the German government agency responsible for regulating the energy industry). Things were especially tight last winter. The system was almost brought to its knees during the week of Feb. 9. There was little wind, little sun and we hardly had any reserves. Some oil-fired power plants in Austria had to be connected to the grid to guarantee the security of supply. Shutting down nuclear power plants is initially going to be a step backwards for climate protection.

Ooops, turns out trying to replace nuclear power with solar not only turns large parts of Europe into glass/metal desert, but rare, unthinkable phenomenon known as slightly cloudy day turns "clean" renevables into big CO2 emitters. Who would have thought? Well, except for everyone sane who bothered to read anything on the topic?

Anyway, say what you want about EU, but continent needs some sort of meritocratic, yet responsible before voters, overseeing net too big to be bribed like national governments looking for common good of everyone, even when particular countries drum up baseless nationalistic or pseudoecologic hysteria to score a few more votes or donations in coming election. See no further than first article above, why otherwise sensible governments can protest decision saving both European economy and environment in one is beyond me

[madd0ct0r]

i don't think anyone here has recommeneded swapping nuclear for solar. Solar for coal and gas as fast as is practical, yes.

[Irbis]

i don't think anyone here has recommeneded swapping nuclear for solar. Solar for coal and gas as fast as is practical, yes.

The problem with Europe is, quite a lot of countries are in fact proposing to swap nuclear for solar and leaving coal and gas in place. It's that bad. Not to mention the fact most forms of renewable energy do require coal or gas plants on standby to supplement and replace them in unfavorable conditions. It's inevitable, really.

Plus, IMHO, there are countries where solar can really work. Countries close to equator, or with deserts. In Europe? To be honest, not only local conditions (read: laws of physics) say renewables are pretty much infeasible, they have so low energy density compared to normal power plants you either have to cut food production or ruin last undeveloped pieces of land where wildlife can still thrive.

When I compare say bird populations from what I remember 20 years ago and what I see now - it's just sad. Only species that seem to cling is common dirty pigeon. I don't think I saw a butterfly for years now, in a city where you couldn't pass a day without seeing multiple. I live in a very rural, still developing, wild region, making it even sadder. How making it even worse is "green"?

[EnterpriseSovereign]

Doing a little reading up, I can see why the UK is going for wind power over solar power with offshore wind farms- we don't have a lot of sunshine, we have a lot of wind, and being an island nation one thing we're not short of is coastline

[LaCroix]

Same for Austria and Hungary - Hardly any public solar (expect for vienna), lot's of private solar, but wind masts are set up everywhere - we do have like 300 days of wind per year, and usually 40-50kph, so it does make sense to use that.

[Irbis]

One additional article on the topic, explaining the issue a bit:

To kill a promising new industry, just subsidise it

Three years ago, bosses at US company First Solar boasted that their thin film photovoltaic panel factory near Frankfurt am Oder in Germany was the world's most efficient.

With production costs of just 81 US cents for each watt of generating capacity, they claimed they could outcompete any other solar panel company in the world, including manufacturers from China.

Since then First Solar says it has extended its lead as the world's most efficient producer of solar panels, cutting its manufacturing costs to just 68 US cents per watt.

But that improvement wasn't enough to save the Frankfurt plant. First Solar closed the five-year-old factory at the end of last year. The reason: it was unable to compete with solar panel manufacturers from China.

In this case the competitiveness of Chinese companies had nothing to do with the rock bottom wages they pay their workers. Solar panel manufacturing is so heavily automated that variations in labour costs have a negligible impact on overall costs. The assembly lines are staffed by robots rather than humans.

What really matters are differences in capital costs. And there First Solar's Frankfurt factory didn't stand a chance. Between 2007 and 2012 the Chinese government lavished such generous capital subsidies on its solar panel manufacturers that factories elsewhere couldn't hope to compete.

That's ironic, because the reason First Solar opened in Frankfurt in the first place was because the local Brandenburg state government subsidised around a quarter of its initial construction costs with €27 million in cheap loans.

But that pales in comparison to the munificence of the central and local government subsidies that were available in China.

According to Usha Haley, co-author of a newly published book Subsidies to Chinese Industry, state banks in China were prepared to fund up to two-thirds of solar companies' investment costs, offering cut-rate loans complete with a five-year holiday on both interest and principal payments.

In 2010 alone, China Development Bank lashed out more than US$31 billion in loans to just five solar panel companies. And that's in addition to a host of other subsidies including direct grants from local governments, tax breaks, cheap land and discounted energy costs.

With such massive state largesse on offer, it's hardly surprising that companies queued up to take advantage. Between 2008 and 2012 China's solar panel production surged tenfold, with Chinese manufacturers capturing around 80 per cent of the international market.

With such a glut of supply, panel prices plunged. Between 2010 and 2012 - the period over which First Solar managed to cut its manufacturing costs by 16 per cent - the market price of solar panels fell 66 per cent.

Not surprisingly, panel-makers all over the world started running into financial trouble. Now their debts are coming due, even subsidised Chinese producers are beginning to default.

In a bid to protect its own domestic manufacturers, last year the United States imposed import tariffs on Chinese panel-makers for dumping - selling at below cost - and for receiving unfair subsidies.

Then this week the European Union also ordered anti-dumping duties - reported to be as high as 68 per cent - on Chinese panel imports, while threatening a separate set of countervailing tariffs against China's subsidies.

Predictably, Chinese officials complained about European protectionism, and advised the EU to proceed "cautiously".

Yet it's Beijing that should have been cautious. By offering huge subsidies in a reckless bid to win market share, China has succeeded only in eviscerating a developing global industry.

As a result, 1,200 employees from First Solar in Frankfurt are now out of work, no matter how efficient their factory.

China produced yet another bubble, which is threatening existence of cutting edge technology companies in EU and USA, then, when they fall, also existence of solar industry in China. So, if that bubble bursts, we can suddenly wake up to producing capability failing to meet demand. This is particularly dangerous in solar because panels don't last long, 15-25 years, and they need to be continuously replaced as they age. What China was, intentionally or not, doing, was to produce similar dependency on their panels as the west now has to oil. I have to admit, I now understand German position in opposing European Commission even less.

Oh, and China already fired counter-sanction for this to only EU country that doesn't need to bother with solar energy and thus supports European Commission's stance:

China wine anti-dumping probe sparks French anger

The French government has labelled a Chinese anti-dumping probe into wine imported from the European Union (EU) "inappropriate and reprehensible".

China launched the investigation a day after the EU imposed anti-dumping levies on Chinese solar panel imports.

Speaking to the BBC, wine consultant John Warontshak said that the move was "partly symbolic", but that the imposition of a tariff on imports would have an impact on French producers in particular.

"France is by far the biggest exporter to China. Most of that Bordeaux red," he explained.

[Welf]

China produced yet another bubble, which is threatening existence of cutting edge technology companies in EU and USA, then, when they fall, also existence of solar industry in China. So, if that bubble bursts, we can suddenly wake up to producing capability failing to meet demand. This is particularly dangerous in solar because panels don't last long, 15-25 years, and they need to be continuously replaced as they age. What China was, intentionally or not, doing, was to produce similar dependency on their panels as the west now has to oil. I have to admit, I now understand German position in opposing European Commission even less.

That's just because German governments like to dance around the golden calf of free international trade. And have read too many articles of how big and bad china is.

But the most important lesson is: it's true that trade wars are always stupid, because both sides lose. But it's also true that you can win wealth for your country with protectionism. And if you know the other side won't do anything, you can try that. Which is why trade wars are a good idea sometimes, even if in the case at hand you might lose wealth.

It's sad that this brought the solar industry down on it's knees, we will lose a few years of technological development by this.

[Purple]

Random question. Do you think that if solar tanks now people would be more favorable toward adopting the nuclear option? (I know this is not very articulate but it's late and I am tired.)

[Irbis]

Random question. Do you think that if solar tanks now people would be more favorable toward adopting the nuclear option? (I know this is not very articulate but it's late and I am tired.)

To be honest - I think all energy-generating options are bad. However, we can't continue use of CO2 generating sources, and renewables either use enormous amounts of land or are just as dangerous as nuclear power. Hence, nuclear fusion/fission is the only option that gives stability to civilization, permits growth and minimizes land usage (something that IMHO is just as important as limiting CO2 emission). Least evil, so to speak.

But, no, if solar fails, I wouldn't be surprised if we went right back to coal. It's what Germany an a lot of EU does - anything, but not nuclear. Hell, we might go back to burning wood instead of coal, just because it's "renewable" too, despite being even dirtier than coal plants.

[AniThyng]

Minimizes land usage, until you have an accident and a 30 mile radius exclusion zone, you mean.

[Jub]

Minimizes land usage, until you have an accident and a 30 mile radius exclusion zone, you mean.

How often has that happened and how many accidents have occurred with modern designs? The answer, not very many and only two have had long lasting effects.

[TimothyC]

Minimizes land usage, until you have an accident and a 30 mile radius exclusion zone, you mean.

With a grand total of two accidents* that have generated that size of exclusion zone in the thousands of reactor-years that have been run, I think it's still a reasonable trade-off.

*One where the operators were doing something that was counter-indicated, and one where they got hit with a fracking Tsunami

[mr friendly guy]

I have a question. When is it counted as "low interest" and when does it cross the line into subsidies and hence anti-competitive. Because it seems like from the articles First Solar was also subsidised by an European government, but its only bad when someone else manages to out do you.

[Zaune]

With a grand total of two accidents* that have generated that size of exclusion zone in the thousands of reactor-years that have been run, I think it's still a reasonable trade-off.

*One where the operators were doing something that was counter-indicated, and one where they got hit with a fracking Tsunami

Never underestimate just how spectacular a fuck-up can result from outsourcing to the low bidder.

[Sea Skimmer]

I have to admit, I now understand German position in opposing European Commission even less.

The Germans are worried about a trade war, the specifics of the small solar industry could matter less compared to the implications of such a thing were it to get out of hand. German industry thrives on exporting machinery to equip all those heavily subsidized Chinese factories, if anything were to interfere with this it could be disastrous. For now its a limited concern because many machines are effectively only made in Germany, but the more China buys, the less they need, and the more able they become to build stuff domestically. Germany would rather not encourage anything which would speed that up. Meanwhile most of the EU's states only exports luxury goods to China, and China's counter sanctions are gunning for precisely such products. That was very deliberate on the part of China.

[Irbis]

Minimizes land usage, until you have an accident and a 30 mile radius exclusion zone, you mean.

A) The only 2 nuclear accidents in Europe, Windscale and Chernobyl, happened in military reactors producing plutonium during rushed, completely irresponsible violation of procedures. There were none in civilian plants. We reached 15.000 reactor years late 2012, how much proof more is still needed?

B) Chernobyl excursion zone is about the size of area you'd need to cover with solar panels to produce similar amounts of energy - except solar plant is essentially dead desert, while a lot of reports say excursion zone was largely overreacted and is in fact now one of the (save for a few worst spots) biologically diversive places in Europe. In fact, it's great case for best nature preservation being minimizing amount of space humans use, and renevables are terrible way to do that.

The Germans are worried about a trade war, the specifics of the small solar industry could matter less compared to the implications of such a thing were it to get out of hand. German industry thrives on exporting machinery to equip all those heavily subsidized Chinese factories, if anything were to interfere with this it could be disastrous. For now its a limited concern because many machines are effectively only made in Germany, but the more China buys, the less they need, and the more able they become to build stuff domestically. Germany would rather not encourage anything which would speed that up. Meanwhile most of the EU's states only exports luxury goods to China, and China's counter sanctions are gunning for precisely such products. That was very deliberate on the part of China.

But the thing is, second article I linked was how subsidized Chinese panels destroy high-tech, leading plants in Germany, so opposition to EC when it's trying to save German economy makes little sense. China needs German machinery either way, and what Germans are now doing (destroying their competitiveness due to "renewable" based energy prices skyrocketing and power grid slowly becoming unsuitable to run factories) will kill German exports quicker than any trade war possible under WTO. If anything, what makes sense is cutting dependence on Russian gas and Chinese solar panels.

[AniThyng]

Minimizes land usage, until you have an accident and a 30 mile radius exclusion zone, you mean.

A) The only 2 nuclear accidents in Europe, Windscale and Chernobyl, happened in military reactors producing plutonium during rushed, completely irresponsible violation of procedures. There were none in civilian plants. We reached 15.000 reactor years late 2012, how much proof more is still needed?

Since when was Chernobyl a military reactor? And you seem to have hit on the problem - in few other industries are the consequences of irresponsible violation of procedures so severe and long lasting as nuclear. Yes, dams can fail, yes, airplanes can crash, but all it takes is one nuclear accident and nothing else matters.

And those are hardly the only accidents, there are plenty of violations and incidents that happen. Or did we forget the articles on this very board some time back about irresponsible disposal practices in GERMANY, of all places.

[Sea Skimmer]

A) The only 2 nuclear accidents in Europe, Windscale and Chernobyl, happened in military reactors producing plutonium during rushed, completely irresponsible violation of procedures. There were none in civilian plants. We reached 15.000 reactor years late 2012, how much proof more is still needed?

Chernobyl was a civilian plant by any rational standard, and Windscale caught on fire because the procedures were not compliant with the laws of nuclear physics and the reactor had design flaws; but nobody actually did anything they knew they shouldn't. They did not know what they should be doing.

In fact, it's great case for best nature preservation being minimizing amount of space humans use, and renevables are terrible way to do that.

I don't feel like looking links up right now, but a lot of researchers have strongly disputed the recent claims that wildlife of all forms is thriving in the exclusion zone. Certain things in certain parts, yes. Other things no. Also Chernobyl was already surrounded mostly by forest limiting the displacement of people and loss of infastructure, many nuclear plants in the world would cause much greater loss if they had major accidents. That's besides the fact that solar farms are not physically tied to the land the way radioactive contamination is. If you wanted to build a highway across the farm some random day, you could, you can't just go do what you want in the exclusion zone, nor will you be able to for several hundred more years.

But the thing is, second article I linked was how subsidized Chinese panels destroy high-tech, leading plants in Germany, so opposition to EC when it's trying to save German economy makes little sense. China needs German machinery either way, and what Germans are now doing (destroying their competitiveness due to "renewable" based energy prices skyrocketing and power grid slowly becoming unsuitable to run factories) will kill German exports quicker than any trade war possible under WTO. If anything, what makes sense is cutting dependence on Russian gas and Chinese solar panels.

German exports to China nearly doubled in the past three years, its worth something like a hundred billion dollars a year now. Hardly something you'd want to rock the boat on. Germany and some other EU members also still believe a negotiated settlement is possible. As far as the WTO goes, the EU is bypassing that organization and thus inviting retaliation outside of the WTO framework. That's precisely what an export led economy should not want. It'd be kind of a problem if say the Chinese decided to limit German car exports to China.