Proposed green energy tariffs likely to have minimal US impact: observers

Source: By Mark Watson, Platts • Posted: Monday, April 9, 2018

The US Trade Representative’s proposed 25% tariff on imports of wind-powered generation sets and battery sets is unlikely to have a significant effect on deployment of these technologies, industry observers say.

On Tuesday, US Trade Representative Robert Lighthizer announced a proposal to levy a 25% tariff on about 1,300 types of imports from China, including “wind-powered electric generating sets” and various types of primary batteries, including silver oxide, lithium, air-zinc, nickel-cadmium and lead-acid. Primary batteries are those that are designed to be used once and discarded.

Lighthizer is soliciting public comment on the proposed tariffs and has scheduled a hearing on May 15 at the US International Trade Commission.

“The Energy Storage Association anticipates that the inclusion of Chinese battery components in the tariffs, as drafted, will likely represent a negligible impact on the growth of the energy storage market,” said Kelly Speakes-Backman, ESA CEO, in a statement Wednesday. “Nonetheless, ESA is concerned by the battery tariffs announced yesterday because the administration is creating unnecessary uncertainty for the U.S. energy storage market. If these tariffs are adopted, the companies and people who plan, build, and service battery storage facilities will be faced with risk that may inhibit storage deployment, even as the U.S. looks to strengthen its energy infrastructure and enhance resilience.”


The tariffs on wind-generating sets may have a bigger impact, as China supplied about 25% of those imported sets in 2017, up from less than 12% in 2015, which was the peak year for wind-generation set imports, at $226 million.

In absolute terms, Chinese wind-generation set imports have grown exponentially — from about $2.4 million in 2013 to more than $53 million in 2017. “These tariffs could have more of an effect on the cost of wind power than the solar tariffs did on the cost of solar power because the turbine set makes up more of the total cost of the wind project,” said Joshua Rhodes, a University of Texas Energy Institute postdoctoral fellow who focuses on renewable energy.

In January, the Trump administration imposed “safeguard tariffs” on imported solar cells and modules over the next four years, starting at 30%, falling to 25% in the second year, 20% in the third year and 15% in the fourth year, with 2.5 GW of imports exempt each year.

Long-term solar power contract prices offered by developers in the Electric Reliability Council of Texas, the Midcontinent Independent System Operator and the PJM Interconnection increased by about $1/MWh in each market, according to a report from LevelTen Energy, which has an online platform linking credentialed renewable energy buyers and sellers.

“Solar panels make up about 30% of the total project cost, but wind turbines account for over half of the costs of a wind farm,” Rhodes said in an email Thursday. “That said, Chinese turbines are used less often than others at US wind farms, but they are looking to grow their US presence.” –Mark Watson,