Solar supply chains must diversify away from China, warns EDP

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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.

Concerns over China’s dominance in solar power

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.

Delays in US solar farms development

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 impact of the Uyghur Forced Labor Prevention Act

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.

China’s significance in solar production

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.

Efforts to prevent unfair trade practices

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’s commitment to renewable energy

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.

Challenges in the offshore wind industry

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

SDGs, Targets, and Indicators

1. Which SDGs are addressed or connected to the issues highlighted in the article?

SDG 7: Affordable and Clean Energy

The article discusses the need to diversify supply chains for renewable power, specifically solar panels, to advance the shift to cleaner energy.

SDG 8: Decent Work and Economic Growth

The article mentions concerns about forced labor in China’s Xinjiang region, which is a key area for the production of polysilicon, the main raw material for solar panels. This highlights the importance of protecting labor rights and promoting safe working environments.

SDG 9: Industry, Innovation, and Infrastructure

The article touches on the need for a competitive and affordable source of solar panels to drive the energy transition. This relates to promoting sustainable industrialization and supporting innovation.

SDG 12: Responsible Consumption and Production

The article raises concerns about the concentration of polysilicon production in Xinjiang, where there are allegations of human rights abuses. This highlights the importance of achieving sustainable management and efficient use of natural resources.

SDG 16: Peace, Justice, and Strong Institutions

The article mentions rising geopolitical tensions between China and the West, particularly regarding concerns about forced labor in Xinjiang. This connects to the promotion of the rule of law and equal access to justice.

2. What specific targets under those SDGs can be identified based on the article’s content?

Target 7.2: Increase the share of renewable energy in the global energy mix

The article emphasizes the need to advance the shift to cleaner energy, specifically through the use of solar power.

Target 8.8: Protect labor rights and promote safe and secure working environments for all workers

The article highlights concerns about forced labor in China’s Xinjiang region, indicating the importance of protecting labor rights and ensuring safe working environments.

Target 9.2: Promote inclusive and sustainable industrialization and support innovation

The article mentions the need for a competitive and affordable source of solar panels to drive the energy transition, which relates to promoting sustainable industrialization and supporting innovation.

Target 12.2: Achieve sustainable management and efficient use of natural resources

The article raises concerns about the concentration of polysilicon production in Xinjiang, highlighting the need for sustainable management and efficient use of natural resources.

Target 16.3: Promote the rule of law at the national and international levels and ensure equal access to justice for all

The article mentions rising geopolitical tensions between China and the West, particularly regarding concerns about forced labor in Xinjiang. This connects to the promotion of the rule of law and equal access to justice.

4. SDGs, Targets, and Indicators Table

Behold! This splendid article springs forth from the wellspring of knowledge, shaped by a wondrous proprietary AI technology that delved into a vast ocean of data, illuminating the path towards the Sustainable Development Goals. Remember that all rights are reserved by SDG Investors LLC, empowering us to champion progress together.

Source: ft.com

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