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SOLAR BLITZ: Solar companies are performing a lobbying blitz in D.C. this week against the Commerce Department’s investigation into Asian PV cell and module imports, which they say has put billions worth of business in jeopardy and left them in a “holding pattern” while they await a resolution.
The background: California-based manufacturer Auxin Solar successfully petitioned the Biden administration to look into whether imports from Malaysia, Thailand, Vietnam, and Cambodia – which, according to the Solar Energy Industries Association, represent some 80% of such imports to the U.S. – are circumventing existing duties on Chinese products.
The complaint from companies that build solar projects: Executives representing firms specializing in both utility-scale and residential solar projects said the investigation, opened on April 1, has forestalled new projects and even led to the outright cancellation of orders due to uncertainty around what the price of products may be if Commerce ends up imposing new duties.
Kelly Friend, VP of policy and regulatory affairs for Boston-based solar provider Nexamp, told Jeremy and Breanne her company is working "head-down" and focusing on its existing investment and projects rather than prioritizing on growth.
Thomas Neyhard, CEO of residential solar provider PosiGen, said his firm’s vendor, which is located in one of the petition’s targeted countries, cut bait because the investigation provides for Commerce to apply duties retroactively to the date it opened the probe.
“I can tell you that on April 1 that the panel company that we deal with canceled all of our orders, and we had to go looking for panels and getting out there and trying to negotiate,” he said.
Neyhart said PosiGen was able to find an alternative provider from among the four Asian countries, but that prices went up.
SEIA, of which these firms are members, circulated figures today showing the trade group has cut its forecasts for solar installations this year and next by 46% because of Commerce’s investigation.
Chad Farrell, founder and CEO of Vermont-based Encore Renewable Energy, said the investigation has put the company in a “holding pattern.”
“It's not ideal to be in a holding pattern when you're in a growth mode,” he said.
Make us source domestically, Lord, but not yet: The solar petition is functionally a battle between U.S. solar product manufacturers and firms that build solar energy projects which, for the relatively small size of the domestic solar manufacturing base, rely heavily on the Asian importers.
Auxin, and other manufacturers before them, argue Chinese companies are dumping cell and module products into the four Asian markets in order to avoid paying duties on Chinese products.
The rub lies in whether the work done on the products in the targeted countries is minor or insignificant and therefore merit an extension of duties. Auxin and co. say yes, while SEIA and co. say no.
In any case, the executives said solar firms want to buy American and would prefer to source all their materials from domestic manufacturers but that they can’t meet demand by using only U.S.-made solar products.
“It really is an availability thing,” Farrell said. “We'd love to buy all our panels domestically. We're just, unfortunately … we're just not there as a country yet.”
“We need to rely on the global supply chain at this point,” Farrell said. “It's a global economy for reasons that none of us sitting around this table had anything to say about.”
There’s also a prevailing consensus that the only way to enable a quick sufficient scaling of the solar manufacturing base would be to pass tax incentives like those proposed in Democrats’ “Build Back Better” plan.
“That process doesn't happen overnight. None of our businesses were started in 18 to 24 months, and so there has to be some sort of transition to that future,” Friend said.
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Jeremy Beaman (@jeremywbeaman) and Breanne Deppisch (@breanne_dep). Email jbeaman@washingtonexaminer.com or bdeppisch@washingtonexaminer.com for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.
RUSSIA CUTS OFF POLAND AND BULGARIA: Russian state-owned gas company Gazprom cut off its gas supply to Poland and Bulgaria, escalating tensions with the West and threatening to further imperil energy security for the rest of Europe.
The cutoff came after Poland and Bulgaria refused to comply with a decree handed down by Russian President Vladimir Putin last month ordering all “unfriendly” nations to begin paying for their gas in rubles. Gazprom said in a statement that the halt in supplies will continue “until the payments are made” using the Russian currency. It also threatened to disconnect any other countries in the bloc who refused to comply.
Mitigating factors: Poland and Bulgaria did not have plans to renew their existing contracts with Gazprom, which were slated to expire at the end of the year. Both had been working well in advance to ensure they had reliable alternative sources of energy.
Poland’s gas company, PGNiG said it would source gas, including LNG, from other countries. Bulgarian gas supplier, Bulgargaz, said in a statement yesterday it had taken the necessary steps “to ensure alternative supplies” of natural gas.
But not all countries in Europe are in the same boat.
Why it matters: Though the actual impact of a ban to Poland and Bulgaria will be limited, leaders said the unilateral shutoff displays Russia’s willingness to weaponize its energy supplies.
European Commission President Ursula von der Leyen called the abrupt suspension of supplies “yet another attempt by Russia to use gas as an instrument of blackmail.”
Polish Prime Minister Mateusz Morawiecki, meanwhile, decried the move as "a direct attack on Poland.”
Bulgarian Prime Minister Kiril Petkov also described the shutoff as “blackmail” by the Kremlin, telling reporters, “We will not succumb to such a racket.”
IEA executive director Faith Birol blasted it as a “weaponization of energy supplies.” Birol also predicted the move would “only accelerate European efforts to move away from Russian energy supplies.”
The view from Ukraine: Ukrainian President Volodymyr Zelensky’s chief of staff, Andriy Yermak, described the gas cutoff as Russia’s attempt to weaken support of Ukrainian allies in Europe. “We see the efforts to up the ante and disregard any rules and obligations, which is typical for Russians,” Yermak said in a statement posted to Telegram.
BACK FROM UKRAINE, DAINES CALLS FOR FOSSIL FUEL PRODUCTION BOOST: In an interview with the Washington Examiner, Sen. Steve Daines, who traveled to Ukraine earlier this month, said the crisis in Europe should serve as a “wake-up call” for the U.S. as it seeks to build out its own domestic production.
“The bottom line is this: Energy security equals national security,” said Daines, who said Putin has the E.U. “over a barrel” as it works to secure energy alternatives.
Europe “[needs] to pivot to America and other more friendly sources for oil, natural gas, and coal,” the Montana Republican said.
Daines also warned that the Biden administration must act to avoid Europe’s fate: "The United States needs to continue to aggressively increase its energy production. I say energy — it’s oil, it’s natural gas, and it's coal — to be the source of energy for the world instead of Russia being the source of energy, particularly for Europe," Daines said.
HOUSE DEMOCRATS PLAN LEGISLATION, NOT RULING OUT GAS TAX HOLIDAY: A federal gas tax holiday is “part of the discussion” among Democratic leadership about how Congress can help lower gasoline prices, caucus Chairman Hakeem Jeffries said this morning.
He said that Democrats plan to pass legislation addressing gas prices. But he responded that “nothing has been ruled in, and nothing has been ruled out” when asked if leadership would support a holiday, something several Democrats, including Sens. Mark Kelly and Maggie Hassan who introduced legislation in February providing for a holiday, have supported.
Gas prices remain elevated in concert with high oil prices. Brent and WTI crude both opened above $100 per barrel today.
Retail gasoline averaged $4.1 per gallon for the week ending April 25, an increase over the preceding week.
Meanwhile, gas tax going up in California: The California legislature is going to miss a May 1 deadline to kill the annual summer increase in its 51-cent gas tax, Gov. Gavin Newsom’s office said – read more here.
The Rundown
Euractiv Macron on the lookout for France’s first ‘climate’ prime minister
Wall Street Journal Russia tried to sell a huge slug of oil. Nobody wanted it.
Associated Press The AP Interview: UN nuke chief wants Ukraine plant access
Calendar
THURSDAY | APRIL 28
10:00 a.m. House Energy and Commerce’s Energy Subcommittee will hold a hearing with Secretary Jennifer Granholm on the fiscal year 2023 budget request for the Energy Department.
10:00 a.m. 2318 Rayburn The House Science, Space and Technology Committee will hold a hearing on climate change mitigation.