pv magazine: Can you state your name and title for the recording?
James Watson, CEO SolarPower Europe
Well, not for long.
That’s right [laughs]. But I think the first thing to say is that since I’ve been here, you’ve seen some quite profound changes in the way the organisation has performed. I’ve done a lot to take EPIA [European Photovoltaic Industry Association], as it was, to now SolarPower Europe onto a different level. I think we’ve really seen some quite strong successes.
What stands out for you, in terms of successes on the policy front?
What stands out the most for me on the policy side is the support that we’ve played in removing the trade barriers on Chinese panels [in Europe]. I think that was good support for the sector in that it said, ‘we are not going to slow down the sector and the deployment in Europe any more, pursuing a failed policy’. This required getting the European Commission and the EU member states to understand that and accept it. I was really pleased to see that we came to that point in September. It was not like we were celebrating and opening bottles of champagne, but for us this was a barrier to deployment and we were really happy to see it go.
Secondly, and in relation to that, I am very proud that SolarPower Europe has led the push at the European level to have an industrial strategy for solar. That is now under development at the European Commission, through the Clean Energy Industrial Forum.
Did your work on the EU solar trade case issues inform the industrial strategy work?
One of the things that we learned on the trade case was that no-one was investing in solar cell and module manufacturing, despite the trade measures being in place. So, we realized that there needed to be something else to get the investment flowing, things like access to financing, relaxation of state-aid rules – these were the sorts of things that would really make a difference to an investor [in solar manufacturing]. I am really proud that we have begun to make progress there.
Whilst we are discussing the policy side, I did want to say that the ‘right to self consume’ is something that Solar Power Europe has been working on, to have recognized, over the last couple of years. I am really excited and pleased that the European Commission, the member states, and the European Parliament have agreed that as a citizen of Europe you have the right to enjoy your solar system, without any discriminatory charges, taxes, burdens or prohibitions. All of that, this ‘sun tax’ idea, is all dead. Come 2021 and that point forward, you as an EU citizen, have a right to self consume, self generate and store your solar electricity. It is not often that you get a new right, and I am really happy to see that through.
Looking at your move to Eurogas, of course people are going to say that you are now going to the ‘dark side’ of fossil fuels. How do you explain your motivation to make the switch?
Next year, the EU will launch something called the Gas Package. Being a lobbyist by nature, I had worked quite heavily on the [European solar] trade case and the [EU] Clean Energy Package, and the next big game in town is going to be on the Gas Package and how renewable and decarbonized gas needs to become more of a natural part of the gas mix. I honestly thought it would be a good opportunity for me to go on and play an important role in the next sector – moving from electricity to gas.
We have gone through this huge electrification discussion. But even eurelectric’s [the electricity sector association] most optimistic scenario concludes that electrification will only get us 60% of the way to powering the whole European economy – which means that 40% will come from gas. In a more realistic scenario, the mix is going to be more like 50/50.
And you see solar playing a role here?
One of the key elements that I’ve become increasingly convinced of is the role, in the future, of things like power-to-gas, or power-to-x. This July, we ran a workshop with Hydrogen Europe and we talked a lot about how solar power can be converted, via electrolysis, to gas. I think when you have this huge amount of gas infrastructure that exists today, it is unlikely that we’re not going to keep it active and full. Thinking about things like that, then the opportunity to fill this gas network with gas from renewable feedstock.
When we started doing our forecast through to 2030, 2040 and 2050, you are talking about 1.4 TW of solar installed – a lot of it in southern Europe. That means that solar will be facing the risk of cannibalizing ourselves, or you can create new demand. Demand for me, would be to creating the renewable gas – hydrogen. I think we’re going to see that, to make sure that there is sufficient demand [for solar].
But that’s not to say that I don’t believe in batteries – batteries will be there and they will be fed. But I think of it more of an ‘and and and’, so solar plus batteries, plus gas.
I don’t know a great deal about gas markets and gas infrastructure, but I can envisage some kind of tension between renewable feedstock for power-to-gas and those players who own and operate existing natural gas reserves. Does that worry you?
There can be and it is something that will have to be looked at. But for those that own the existing gas infrastructure, they will be happy as long as there is something in their pipes – shall we say. That is where they get their value.
My thinking and feeling is that when you are an owner of such things, you have to have an eye for the future. And the future, I would suggest, is that we are going to have to decarbonize, not only in electricity but also in gas. That means that in some point in the future, asset owners will have to think about not only the assets from which they produce their money, such as oil and gas exploration and exploitation, to how they can produce revenue from other sources – and that means solar and wind, as comparative ways of generating the substance, i.e. gas, from which they can maintain their profitability.
Do you ever envisage a situation where you might be working against, or lobbying against, the interests of solar?
Absolutely not. I wouldn’t take the job if I had to start speaking against what I’ve achieved here. That would be nonsensical. I will never speak out against renewables, that is an absolute fact. From an existing natural gas point of view, I can talk very comfortably about the useful role it plays as a balance for renewables – and that is part of the narrative that we’ve had here at SolarPower Europe over the past few years. The interesting thing for me is about how much decarbonized natural gas you can get the system to support.
Going right back to the MIP and trade barriers, when you made the decision to try to bring down their importation barriers, you made some enemies in the solar sector. How difficult was that for you, and how deeply did you contemplate it?
It was a very hard decision. Honestly, it was probably one of the hardest decisions that we’ve made since I’ve been here. It was discussed heavily at the board level. I believe that you can’t be a European industry association, and not have a position on the biggest European issue of the day. There was a lot of hand wringing about it – I can’t underplay that. The [Solar Power Europe] President at the time Oliver Schäfer, was from SunPower and it had its own factories here in France.
Of course, we lost members [as a result of the decision].
Of course, then there is SolarWorld.
Did you make some enemies?
I’m not sure I have enemies. But there are people who disagree with the line that the association took while under me. But nobody has ever come to me personally and said, ‘you’re an idiot and you have destroyed this, that or the other’. We have had a very civilized discussion, and there are always two sides to ever discussion or argument. I have been happy to sit down with people like Milan [Nitzschke, EU Prosun President] and discuss things.
Certainly, there have been some cracks that have been created under my leadership here. But with [incoming SolarPower Europe CEO] Walburga Hemetsberger coming in, her job will be to smooth them over and build new relationships going forward. Some of the decisions that were taken by the association that are very associated with me they can now be moved on from, so we can create that very unified voice for solar.
What do you feel are the most urgent matters for the new leadership to face?
When Walburga comes in, on the political front the most important thing she and her team will have to face is to position solar in a very positive way in front of the new European Commission and new European Parliament. In May, there will be a new European Parliament, and October a new European Commission. Ultimately, there will be a lot of work in preparing and ensuring there is the right policy arc, and positivity, in bringing in the issues that are affecting us to their attention.
The new European Solar Manufacturing Council will launch in the beginning of next year. Walburga will have to spend some time working out how to engage and relate to that organisation. People are calling it the ‘phoenix of ProSun’.
You mention the European Commission. It seems to me that DG Competition has been a thorn in the side of solar at various times during your tenure at SolarPower Europe. Am I right in that understanding?
Walburga has a very strong competition background and I think that is one of the areas where I was relatively weak – having those relationships with DG Competition. Only in recent weeks we were having the conversation about the situation in Germany, the reduction [in larger rooftop system remuneration]. One of the things that DG Competition is very good at is saying, ‘we haven’t requested this action from Germany, but based on our annual review we can see that there was over compensation so we expect them to bring things into line.’ It is the classic DG Competition line: ‘we’re not responsible for what the German government does, but we have to make sure the systems are in line with what they agreed with us about back in 2014.’ So they haven’t asked for it, but they are saying that if the Germans don’t do something, that they would ask for something.
Walburga will have to deal with DG Competition and work out how best to have a relationship with them. DG Competition were at pains to explain to us that it [the German C&I cuts] is not a retroactive measure, but in a way it has a retroactive feeling because some people will be in the middle of building projects that will be affected. Making sure that we get timings right, for the market, will be really crucial.
On a personal note, what will you miss from the solar sector?
I’ll miss all of you guys. I came here from a consultancy, and honestly didn’t really know what to expect. What I have loved about the whole sector is that it is full of optimists, and it is full of innovative and very bright people. I am not divorcing the sector, I am moving into another one. But I intend to keep those important relationships alive. It is a young sector, not an incumbent, growing fast – and it’s disruptive.