The government’s financial aid has given hopes to the company
That they can protect the jobs of their workers and other employees.
The wind energy industry, which has about 20 percent of all electricity, represents 35,000 jobs and approximately 40 billion dollars of investment that is on stake if there will be on policy intervention.
This can also make us question that are we on the brink of Global Recession?
Covid-19 has just worsened the situation of the industries which were struggling from 2017. But it continues to squeeze every opportunity of liquidity in the economy.
Many companies warn that this can be a complete pause in the growth rate of renewable energy installations.
Impact On Clean Energy Existing Projects
Due to market shutdowns all over the world, and the disruption of the supply chain. It becomes difficult to get parts needed to complete a project.
It’s hard to forecast a longer-term impact on the industry.
The impact of Covid-19 led to disruption in many projects and many large industries have reported plant closures.
Resulting in many lay-offs and extensions for many projects.
In the economic crisis of 2009, the package had some important financial aids and investment toward renewable energy in ways that were helping to spring the industry forward.
This time, however, clean energy is holding it back for ready projects rather than projects that are under construction or advanced development.
Impact On Future Clean Energy Projects
The good news during this crisis is that banks have been better in terms of capitalizing but the liquidity is more likely to drive towards oil industries, so the situation is still the same.
Making liquidity weak and investors moving away from high-risk projects.
This becomes a very big problem for the financing of these projects as they are comparatively new and risk-sharing practices are still establishing. Especially, for smaller developers.
Due to the closure of many industry’s power plants, we can say that many greenfield projects which were to start soon will never see that light of day.
This may lead to an increase in energy procurement contract prices in the near mid-term.
This situation was not even predictable, three months ago.
Drop-In The Demand Of Power
As the shutdowns continue, daily energy consumption has fallen, which gives a very big hit to energy providers.
But it remains unclear how they will impact on sub-sectors like renewable energy.
It is a very big problem for many people working in these industries.
Electric Vehicle Demand
This pandemic has made the entry of electric cars as a future entry more delayed.
As the on-going production is being disrupted and restrictions in the labor movement in Asia causing more problems for the same.
Battery Manufacturers like CATL, BYD, and LG Chemicals have all been warning of a negative impact on their businesses.
Moreover, there will be a significant impact on the adoption of electronic vehicles as the sector faces a low oil price situation, and due to the upcoming recession.
The premium prices of electric cars will not be paid by the customers because of the demand of cars decreasing.
Countries With Renewable Ambitions And Their Impacts
China and The US
China and the US will be least affected by exchange fluctuations, and the number of solar installations will be stable as per the expectations.
However, the will feel some slowdown effect, like China’s ability to increase its solar capacity by 40GW will now be later than it was predicting.
In Europe, over 20 GW of solar capacity will except crisis.
But, all of the Euro’s gains on the US dollar from the beginning of the year have now vanished.
Foreign exchange issues for projects in Europe are not an immediate concern but will take the forefront of the Euro falls further.
Strict travel restrictions that are implementing across the continent will now be stopping all the projects under construction.
In India the impact will be less as much as in other regions facing depreciation.
As estimated, the country would see 5.8 GW of utility solar PV projects starting up in 2020, increasing by 9.9 GW in 2021.
India will see 1.7 GW of wind farms start-up in 2020 and 5.1 GW in 2021.
The country is more self-sufficient in terms of turbine production than for solar PV panels.
Therefore India’s expecting wind additions are more likely to reach the forecasted levels.
In Australia, whose dollar hit a 17-year low, developers already started getting fewer otherwise imminent orders.
Much of the 2 GW utility PV solar expecting to start in 2020 in the country as it is already built and work will continue on these projects.
While we look at the bad impacts of Covid-19 on these sectors, some opportunities are emerging.
Government announcing due to this crisis reliefs a great amount of tax.
Will have a good impact on a long-term basis.
In a nutshell, the COVID-19 crisis may have impacted the clean energy projects. But it has also opened some new opportunities.