WTO Dispute – China Revokes Wind Subsidies

December 5, 2011

After having some of its wind power equipment subsidies disputed by the United States at the World Trade Organisation, China has revoked its Special Fund for Wind Power Equipment Manufacturing subsidy. The U.S.challenged that the subsidy was illegal as it provided grants to Chinese wind turbine manufacturers with the stipulation that the manufacturers had to purchase key parts and components produced in China. The grants ranged between $6.7 million and $22.5 million.

In October 2010, the United Steelworkers Union (USW) petitioned to the U.S.government to investigate these prohibitive government incentives, which the Union claimed were protectionist measures that violated free trade by artificially promoting domestic goods at the expense of imports. After conducting a significant investigation, the Office of the U.S. Trade Representative held WTO consultations with China in February. These consultations resulted in China agreeing to remove the Special Fund.

China and the United States are embroiled in a stiff competition to become the global leader in the clean energy technology market place. Over the past year, the United States has not only been replaced by China as the largest cleantech financier, it has also fallen behind in clean energy manufacturing, and its lack of progressive energy policy is driving clean energy businesses to other countries, including China. However, China’s wind energy turbine makers have said scrapping subsidies for the domestic sector will have little impact, even as US manufacturers hailed the move as a victory.

Ukraine introduces Stabilisation Clause for RE Feed-In Tariffs

December 5, 2011

The Parliament of Ukraine has recently amended the Law “On Electric Power Industry” No. 575-97-BP, dated 16 October 1997 (the “Law”), by introducing into Article 17(1) of the Law, an additional State guarantee of renewable energy off-take. This amendment has been perceived by industry experts as another preparatory step towards sector reform, bilateral contracts and balancing the electricity market. The Law is now awaiting the President’s signature and will become effective on the day after its official publication.

This so-called “stabilisation clause” provides that the State shall guarantee that for the whole duration of the feed-in tariffs (i.e. until 2030), there will always be legislation in place which provides for: a mandatory off-take obligation that would apply feed-in tariffs to all volumes of the electricity generated from eligible renewable energy sources; and full and timely monetary settlements for such electricity, as per procedure established by the law.

Senegal adopts Law on Renewable Energy

June 15, 2011

In July, 2010 Senegal adopted the Guidance on Renewable Energy law aimed at promoting renewable energy production in the country. Broadly, the objectives include the target to secure supplies of renewable energy in sufficient quantities at low cost, as well as increase people’s access to modern energy services and reduce vulnerability to exogenous risks.

According to minister of renewable energies, biofuels and aquaculture, Therese Coumba Diop, “Nature has endowed Senegal great potential for solar energy that we can develop“. With the passage of this “law of social orientation”, Senegal might exceed its targets of 15 per cent in 2015 for development of renewable energy.

Turkish Parliament passes Renewables Law

June 15, 2011

The Turkish Parliament approved a law regulating the renewable energy market of the country in December, 2010. The new law limits the volume of energy that the State is allowed to buy, besides determining the long-term prices for electricity purchases. However, energy analysts in the country believe that the law will present more obstacles for renewable energy investors than ease the development process. “While Germany is seeking to get 100 per cent of its energy from renewables by 2050 and England aims to reduce carbon emissions to zero, Turkey’s law – a country which has great wind and solar energy potential – should have promoted renewables far more. Instead of support, the law brings limitations to renewable energy production”, observed Prof. Tanay Sidki Uyar, head of the Turkey branch of European Association for Renewables (Eurosolar).

But the investors’ biggest concern is the feed-in tariff set by the Parliament. The law limits the total production of licensed solar energy companies to 600 MW annually until Dec. 31, 2013, and authorises the Cabinet to determine the limits afterwards. In addition, the law guarantees a price of $7.3 cents per kilowatt-hour  for energy from waste products and solar energy. These rates are said to be very low for a country that needs to work harder to tap into its vast renewable resources, especially in solar and wind. According to market analysts and solar developers, the solar industry in Turkey could become one of the biggest in the world if the government offered the industry appropriate regulatory and financial support as Germany and Spain have done.

“We have enacted a law that will create jobs and encourage industrialists in new sectors,” said Turkish Energy and Natural Resources Minister Taner Yıldız.

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