China's solar shake

While renewable policy is being shored up across the EU, China’s bitter solar trade battle with the US is expected to extend to Europe.

China last week lodged a complaint at the World Trade Organization against US duties on a range of products, including solar panels. China’s envoys in Geneva said the US had acted "inconsistently with WTO rules and rulings in many aspects" and that the US had "repeated its wrongful practice" during its assessment of Chinese solar cells.

The US Commerce Department had announced preliminary anti-dumping duties on PV panels from China the previous week, ranging from 31 per cent to as much as 250 per cent for some manufacturers. Together with the relatively modest countervailing duties of 2.9-4.7 per cent determined in March, they stand to make some Chinese modules 27 per cent more expensive in the US market than those from comparable international manufacturers, according to Bloomberg New Energy Finance analysts.

The two countries will enter into consultations at the WTO for the next 60 days – by which time Chinese solar manufacturers may well find themselves facing a new trade challenge in Europe. The head of SolarWorld, the originator of the US case and Germany’s largest solar panel producer, said the company planned to file a similar anti-dumping complaint in Europe by mid-year.

Amid this turbulence, there were attempts to shore up renewables policy in Europe and further expansion plans in the emerging economies last week.

The UK published a draft Energy Bill with the goal of laying foundations for long-term stability by reforming renewables support and the electricity market. However, it contained few decisions on the new feed-in tariff – which will replace green certificates for larger clean energy projects – or the capacity market. These omissions concerned some industry players.

"Continued uncertainty risks delaying the development of the UK market," a senior official at Vestas Wind Systems warned. Volker Becker, CEO of RWE npower, said: "We feel less clear about the shape of the Electricity Market Reform package now than we did six to 12 months ago."

However, the UK did announce a framework for predictable feed-in tariff cuts for small-scale solar last week, ending months of uncertainty. The new degression mechanism will reduce support depending on the capacity installed in previous periods.

Some developers are choosing to plough ahead with solar projects, on the basis of the Renewable Obligation Certificate scheme for large-scale renewables. UK project developer Hive Energy said it is planning 200MW of solar projects in the UK in 2012, starting with a 40 million pound plant near Hacheston, a partnership with Delhi-based Moser Baer India.

German Chancellor Angela Merkel said she aims to get an agreement on solar subsidy cuts by the summer recess and announced that Germany is also drafting laws for a capacity market as it transitions away from nuclear power to 80 per cent renewable electricity in 2050. With concerns that the energy ‘turnaround’ has been too slow, Merkel gathered state governors last week, agreeing biannual meetings to monitor the transition.

There was more straightforward progress in emerging economies. South Africa approved 19 wind, solar and hydropower projects in a second bidding round, bringing the cost of its program to boost renewables to $8.8 billion. Some 1,043MW of capacity was awarded in the second round, falling short of the 1,225MW available as only 51 of the 79 projects that entered met the qualification criteria. The winning bids were considerably lower in price than the average from the first round for both PV and wind, some 40 per cent and 27 per cent less on average respectively.

Meanwhile, India plans to more than double its renewable energy capacity to 53GW by 2017 under its new five-year plan, according to the Ministry of New and Renewable Energy. The plan targets 5GW of wind and 10GW of solar, as well as 2.7GW of biomass and biofuels, and 2.1GW of small hydro. On the other hand, Brazil delayed its A-3 and A-5 auctions for power contracts further to October, the Ministry of Mines and Energy said. The country will, however, auction contracts to sell biodiesel to Petroleo Brasileiro in June to meet a 5 per cent blending mandate.

In the largest deal of the week, Dong completed the $790 million sale of a 50 per cent stake in its 277MW Borkum Riffgrund 1 offshore wind project in Germany to Kirkbi, parent company of Lego Group, and the Oticon Foundation. Arava Power obtained $204 million financing for eight solar projects in Israel with combined capacity of 58MW. Two energy companies announced new plans also: RWE will build a 100MW solar plant in Morocco for €120–150 million and EDP Renovaveis said it will spend €3.2 billion between now and 2015 on 2.3GW of wind capacity in markets such as Poland, Romania and Brazil.

EU carbon price higher

European carbon allowances, or EUAs, for December 2012 delivery gained 7.1 per cent last week, closing at €6.91/tonne, compared with €6.45/t at the end of the previous week. December EUAs rose steadily on Tuesday along with other financial markets to €7.00/t, their highest level in over two weeks, as investors turned slightly less gloomy about the European debt crisis. The rest of the week saw little movement as the market awaited news on the EU summit in Brussels and prices were supported by the prospect of a supply curb. United Nations Certified Emission Reduction credits, or CERs, for December 2012 climbed 4.7 per cent last week to close at €3.56/t, up from €3.40/t the week before.

Hydro interest

Uganda will spend more than $1 billion on the 600MW Karuma Hydropower Project, according to the office of President Museveni, Bloomberg News reported. There was also more hydro financing news in Asia. After a long delay, the Export Import Bank of China approved a $450 million loan to part-finance the 969MW Neelum Jhelum hydropower project, the Nation reported. India plans to build 2.1GW more small hydro projects by 2017 as part of its latest five year plan, which targets 30GW of additional renewables capacity, Bloomberg News reported.

The Philippines Department of Agriculture will build 40 small hydropower plants by December, the Business Mirror said. In the Americas, Canada’s government ordered BC Hydro to nearly halve its proposed rate increases for customers, CBC said. Meanwhile, the US Department of Agriculture announced $32 million funding for water quality and wetland restoration projects, the Associated Press reported.

UK introduces nuclear support, Germany backs away

The UK introduced a draft new energy bill that will offer stable returns for new nuclear plants alongside renewables, Bloomberg News reported. Meanwhile, Chancellor Angela Merkel said the German government will more closely manage the country’s switch from nuclear power to renewables, Der Spiegel said. The Czech Republic plans to source 50 per cent of its electricity output from nuclear power, according to Hospodarske Noviny, citing a government report.

Also in Europe, Sweden’s ÅF won a $89 million contract for design and support services in the construction of a third reactor at Brazil’s Álvaro Alberto nuclear plant, the company said in a statement. In the US, President Barack Obama moved quickly to nominate nuclear waste expert Allison Macfarlane to replace Gregory Jaczko as head of the Nuclear Regulatory Commission following the latter’s resignation. Meanwhile, amid continued rancour over its nuclear intentions, Iran is planning a second 1GW nuclear plant in Bushehr in 2013, and a further plant in coming years, AFP reported.