European carmakers are turning to electric versions of retro models, the FT reported from the Paris Motor Show this week, as they battle with the rise of Chinese electric cars. But Europe’s dilemma around China’s clean tech goes far beyond the auto sector, as I explain below . . . The inverter’s uncomfortable moment in the sun Has any technology been more unfairly overlooked than the power inverter? It’s been central to the global clean electricity boom — yet has long received little attention outside energy geek circles. This year that has changed in a big way, with inverters now looming large as governments grapple with energy security worries and related trade issues. The next developments here will tell us much about the future shape of the clean energy supply chain — and how far security worries will threaten China’s dominant role within it.
Without inverters, solar panels would be of little use to the world’s power grids. The tech is essential for converting direct current, generated by solar cells, into the alternating current that sends electricity coursing through transmission lines. They play a similarly crucial role for battery storage systems and wind farms. These days, inverters are highly sophisticated pieces of kit, with the power to control key functions of renewable power plants, and digital connections that allow for remote monitoring and software updates. And as is the case for so many cleantech products, most global production is in China — with the market led by Huawei, long viewed with particular suspicion by the US and other governments over its alleged military connections.
All this has suddenly got western officials very nervous. Earlier this year, Brussels announced that EU funds could no longer be used to support projects using inverters from specified “high-risk” countries: namely China, plus Iran, Russia and North Korea. This will affect a large chunk of European renewables development: the European Investment Bank alone said it helped finance a fifth of the continent’s new solar capacity last year. The rule is likely to push up costs as developers turn to more expensive European-made inverters — a prospect that has drawn particular alarm from industry groups in eastern Europe, which appealed in vain for a rethink.
The EU has signalled that this could be the precursor to a much more sweeping move, banning Chinese-made inverters from the EU market altogether. But as it pursues an improved economic relationship with China, Brussels has decided to talk the matter through with Beijing. EU trade commissioner Maroš Šefčovič (left) and Chinese vice-premier He Lifeng at last week’s talks © Tian Yu/Xinhua via AP
Last Friday evening, the EU and China published a joint statement on a “pragmatic and productive” two days of trade and investment talks. China agreed to limits on its exports of hybrid cars to the EU — a relief for the bloc’s struggling automakers. In exchange, it secured an agreement to hold “further discussions” on inverters. Just two weeks ago, an official EU expert panel delivered an in-depth report on cyber security risks around solar power. It warned of the potential for “back doors” to be built into inverters by their manufacturers “on behalf of a nation state actor”, enabling power supply to be disrupted or cut off. The panel recommended tough new rules around digital communication to and from inverters, and “restricting the use of high-risk suppliers”.
Similar concerns have prompted action on inverters in Washington. In July, federal regulators added foreign-made “connected power” inverters to a list of prohibited equipment for US grid projects, citing national security risks.
Source: Financial Times Companies · Summarized by HeadlinesBriefing