| | October 20238By Juergen Soete, Department Manager Solar Technics, EQUANSSOLAR: A PROMISING MANUFACTURING INDUSTRY IN EUROPEThe European Commission is ambitious regarding the amount of investment in renewable assets and the creation of a European PV manufacturing industry in renewables. They aim to reduce European dependency on the dominating Chinese supply chain through a self-securing strategy. Given the unstable geopolitical environment, there is indeed a vulnerability to remedy, but there are believers and non-believers in the chances of such a strategy succeeding. Moreover, the greatest barriers to rolling out this EC renewables strategy exist within the European community and its enormous diversity.The variety of European rules, standards, and legislation is almost hilarious. This is a potential failure factor to enable competitiveness in the PV manufacturing market. The PV market has been extremely price competitive and has undergone a tremendously fast lifecycle. Chinese suppliers reached extreme efficiency in manufacturing modules/wafers thanks to the mass production approach, with massive local support in R&D and cheap (subsidized) raw materials. As the PV market acts in the utility market, a typical commodity market, the main driver to win a position in the market is price. If Europe ever wants to consider any competitiveness, mass production is the critical parameter that must be implemented. This scale should be applied from the production of polysilicon (and sand mining), over wafer production, up to assembling modules. Only on a pan-European level, this kind of scale can be achieved. Current trials in the Netherlands, France, Germany and Swiss remain very marginal and can only service the upper market (non-utility scale) due to price differences. This requisite is in strong contradiction with the variety of policies about PV within European countries. Important differences exist in how countries allow/abolish large-scale PV projects. Local regulations are in place about biodiversity or planning requiring other technologies and structures; regional grid requirements differ strongly, and legal sustainability rules differ in combination with subsidy schemes linked to technologies. Considering all these local specifications, a different technical solution with different choices of materials, modules, structures and inverters is required in every country. How are we creating mass demand volumes in Europe, supporting the local manufacturing industry in PV?The first general idea to boost European PV is to review the existing subsidy schemes. Currently, support is still allocated upon financial arguments trying to link total investment costs for PV capex to electricity market prices. In the given environment, the industry should even consider the independency and stability of electricity cost prevailing over the cheapest electricity price, and a small premium should not be a hurdle for investment. PV often achieves even a lower cost of electricity production than electricity market prices. Industries should not compare the IRR of PV with Juergen SoeteIN MY OPINION
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