The Worldwide Vitality Company has warned that China’s dominance of the photo voltaic panel provide chain may gradual the worldwide transition to cleaner vitality.
An IEA report on the difficulty, the primary of its type by the organisation, discovered that China’s share within the manufacturing phases for photo voltaic, from the manufacturing of polysilicon to the panels themselves, exceeds 80 per cent, and in some phases may attain as excessive as 95 per cent by 2025.
“The world will nearly utterly depend on China for the availability of key constructing blocks for photo voltaic panel manufacturing by 2025,” the company stated within the report. “This degree of focus in any world provide chain would characterize a substantial vulnerability.”
The report discovered that prime commodity costs and current bottlenecks within the provide chain had already led to an increase of 20 per cent in panel costs over the previous yr, which has resulted in delays of their supply internationally.
“One of many causes we made this report is to focus on this vital weak spot within the photo voltaic PV provide chain, to name for the governments for diversification, to scale back the availability chain vulnerabilities,” Fatih Birol, head of the IEA, informed the Monetary Instances.
The dangers of a photo voltaic panel provide chain concentrated in China “is just not solely a geopolitical challenge. It may be a fireplace in main services. It may be floods. Disruption of [the solar PV supply chain] has big implications for our clear vitality transition and vitality safety,” Birol stated.
Photo voltaic vitality is a key aspect within the IEA situation of the world reaching web zero emissions by 2050. The vitality supply is scheduled to account for 33 per cent of world electrical energy technology by then.
A faster shift to photo voltaic vitality is a extra urgent challenge for the European Union, which is going through the necessity to wean itself off its dependence on Russian fuel. Beneath the bloc’s “RePowerEU” plan, it’s focusing on to put in greater than 320GW of photo voltaic PV by 2025, and nearly 600GW by 2030.
Birol has beforehand informed the Monetary Instances that Europe wants to organize for a complete shutdown of Russian fuel exports.
International locations and groupings just like the EU “must have tailored funding insurance policies” to spur funding in photo voltaic panel manufacturing and construct their very own provide chains, Birol stated. China at present loved a significant benefit on photo voltaic panel manufacturing, due to decrease vitality and labour prices, in accordance with the IEA chief.
“Tax incentives for producers, construct a producing facility in business clusters to scale back land price — these might be some concrete, fast implementable insurance policies that might be launched with a view to present a aggressive edge vis-à-vis low-cost price of producing in China,” Birol stated.
The report additionally famous that China’s Xinjiang province accounted for 40 per cent of world polysilicon manufacturing. China has confronted allegations of widespread human rights violations there, and the US in late June began imposing a ban on imports from the region, together with photo voltaic panel supplies.
Whereas the report didn’t point out the alleged use of pressured labour in Xinjiang, it stated the world wanted to “strengthen worldwide co-operation on creating clear and clear requirements, making an allowance for environmental and social sustainability standards”.
