The importance of renewables in the transformation of the European production model has turned the decarbonization process into an opportunity for the Old Continent to recover its photovoltaic solar industry more than a decade after its relocation to Asia.
To achieve this, the region aims to recover its industrial capacity at the top of the value chain, with the production, for example, of solar panels, until now monopolized by China, where almost 90% of those installed in Europe come from.
These are the calculations of Javier Sanz, head of the renewables area of EIT InnoEnergy, a company that manages the secretariat of the European Solar Photovoltaic Industry Alliance, of which the European Commission itself is part, and which seeks to accelerate this sector with a clear goal: to produce 30 gigawatts (GW) in 2025.
In an interview with EFE, Sanz reviews the state of an industry that has its weakness at the top of its chain, “from polysilicon to solar panels,” following the crisis that hit the sector in 2010.
Since then, European industry “basically disappeared” and moved “quite quickly” to China.
In the last decade, the Asian giant has also managed to attract capacity from Japan and the United States, according to the International Energy Agency (IEA), which maintains that China’s participation in the entire chain of solar panels exceeds 80%, more than double what it represents in global photovoltaic demand.
In addition, the country is home to the top ten suppliers of manufacturing equipment for solar energy.
Behind this success story is an investment of more than 50,000 million dollars (about 47,000 million euros) in new photovoltaic supply capacity, ten times higher than that of Europe, and the creation of 300,000 jobs since 2011.
On the other hand, the executive director of Infoenergética, Andrés Muñoz, explains in an analysis collected by EDP (ELI:EDP), China is the most cost-competitive place to manufacture these components, being 10% lower than India, 20% lower than the United States and 35% cheaper than in Europe.
According to the IEA, the emergence of Chinese industry has been important in reducing the cost of solar PV worldwide, and has contributed to the energy transition.
But at what price?
“To get an idea of the size of the dependency we have, that 90% of products that are being imported into Europe from China represent about 20,000 million euros a year,” adds Sanz.
A EUROPEAN ALLIANCE FOR GREATER AUTONOMY
In recent work, the IEA warns that geographical concentration in global supply chains creates, at the same time, “potential challenges” to be addressed.
This is where the European Solar Photovoltaic Industry Alliance comes into play, an initiative launched by the European Commission, industrial agents, research institutes and associations, which wants to contribute to mitigating the supply risk.
Reaching its target of 30 GW of European manufacturing capacity by 2025 would generate €60 billion of gross domestic product (GDP) a year in Europe, and create more than 000,400 jobs.
“There have been three factors that have changed the vision of companies, institutions, Member States and the Commission itself,” says Sanz.
The first, he continues, is technological change, which means that “the product that is being brought to the market is exhausting its development capacity and it is necessary to change others that will have a valid efficiency.”
In a way, “this ensures the opportunities for entry to new investors, because the manufacturers already installed are also going to have to address invasions”, so that “the ground is equalized”.
In this sense, the head of the renewables area of EIT InnoEnergy is optimistic, and that “Europe has been investing in R+D despite not having a solid industry”, so that, from the technological point of view, “it still maintains an interesting competitiveness”.
The second factor is related to the European Green Deal and the “ambition” to go towards decarbonization. This is generating “a very important demand for renewable installations”, creating a domestic market that did not exist before.
While the third and last arises with the breakdown of supply chains by the pandemic, then aggravated by the war in Ukraine, and dependence on gas.
“The reflection is: ‘I want to be independent, create an industrial fabric that sets jobs in Europe and have that ability to lead the sector again, as in its day,'” says Sanz.
THE BRUSSELS CHALLENGE
However, the question now is not “that nobody gives a magic recipe, but that the whole sector contributes to say what it needs”.
The future will require training for highly qualified profiles, and, obviously, more investments, given the policies of competitors such as the United States, which, however, “is behind Europe in implementation”.
With its Inflation Act -IRA, in English-, the country “is generating closed market conditions”, but it is not the only example, since India “is doing the same” by decarbonizing its economy “with fundamentally local products”.
“Europe has a challenge, to define how it is going to respond to this,” says Sanz.
And he concludes: “If by achieving the goal of decarbonization you manage to consolidate an industry that you did not have before, it would be a double benefit. You have to seize the opportunity.”