26. januar 2024
Emne:
NZIA - Evidences that cost concerns for Public procurements and Auctions are unfounded
Dear Permanent Representatives,
As negotiations on the NZIA reach their final stage and focus on how to apply social and environmental
criteria for public tenders (articles 19 and 20),
I am reaching out to you to provide you with clear new
evidence that demonstrates cost concerns about the
Parliament’s current approach are unfounded.
Moreover, a compromise as proposed by the German government that based on market segmentation with
very low and slow application of these criteria would completely fail to de-risk EU supply and would
effectively guarantee the de-industrialisation of solar PV in Europe. We therefore urge you to seek a
compromise with the EU Parliament that includes the following key enabling elements for a competitive and
resilient EU solar PV industry. New research has shown that, an effective design of the following articles will
not only ensure a diversified module supply in Europe and the achievement of renewable build-out targets
but also reduce the overall subsidy needs for competitive solar value chain in Europe:
•
A Rapid phase-in of pre-qualification and qualitative criteria will not increase but decrease total
subsidy needs
(Article
20 Paragraph 3a, second subparagraph):
o
Introduction pre-qualification criteria for forced labor will significantly reduce the
existing price gap between Chinese and domestically manufactured modules (production
costs for Chinese modules will approx. increase by ~5cts/W):
▪
Hence, 100% of auction volume and public procurement volume should be subject
to responsible business conduct (forced labor)
▪
Further, to incentivize procurement of "friendshored" modules, no more than 50%
of the net-zero technology part of the tender shall originate from third countries
that are not signatories of the World Trade Organization (WTO) Agreement on
Government Procurement (GPA).
o
Latest calculations support a rapid phase-in approach, which is effective for ensuring a
level playing field with non-EU manufacturers, without significantly increasing costs or
negatively impacting the achievement of RES targets.
In analyzing four phase-in pathways
for the qualitative criteria, a rapid phase-in (50% in 2025, increasing to 100% by 2027)
strikes the optimal balance between cost and effectiveness with regards to the NZIA’s
goals.
A quicker and clearly defined ramp-up of EU and "friendshored" volumes will lead
to scaling effects and associated price degressions kicking in earlier than in a slow phase-
in trajectory. This will lead to converging price patterns and a level playing field for EU
modules much earlier than in the case of an ongoing market segmentation that will most
likely exacerbate the price gap.
Disproportionate Costs
(Article
20 paragraph 3)
:
o
In applying sustainability and resilience criteria, the cost difference will be assumed as
disproportionate when the price difference is above 30% in public procurements and 20%
in auctions. This is only valid under the prerequisite of a prequalification which bans all
modules produced under forced labor from the entire EU market and causes a price
convergence of Chinese modules and EU manufactured modules.
o
Taking into account error variance and the possibility that effects of scale are less
pronounced than the model assumesI, an
investment-proof benchmark for
disproportionate price differences must be at least 30%.
•