Throughout the world, COVID-19 has forced production to slow or stop across supply chains, and travel bans have severely limited the manpower available to work on assembly and deployment. These obstacles will inevitably affect renewable energy projects across the globe. Additionally, the economic contraction caused by the pandemic has caused crude oil prices to collapse. This has prompted oil companies to start cutting expenditures, such as investments in renewable energy, to protect existing oil and gas investments. The U.S. Energy Information Administration (EIA) is predicting that U.S. wind and solar capacity will be 5% and 10% lower than expected. Is this a sign pointing to a dark future for renewable energy, or is there still a glimmer of hope?
Realistic Optimism in Europe
Faced with the challenges of COVID-19, European renewable energy manufacturers have chosen to respond bravely. Some major wind turbine manufacturers such as Siemens Gamesa and LM Wind Power temporarily shut down their nacelle and blade factories to protect their employees in response to the pandemic. However, overall productivity of the entire European renewable energy industry remained at 96% capacity.
Danish leading green energy company Ørsted officially stated that it will maintain its original financial forecast for 2020 because their wind farm construction plan has yet to be affected. Furthermore, under the protection of both feed-in tariffs and priority procurement policies, revenues generated by the completed wind farms are holding steady despite the virus. The solar energy industry has taken a similar response to this pandemic. For example, a utility-scale solar power plant in Texas that completed financing in March continues to work on projects to reduce the loss of feed-in tariff contracts while making adjustments to improve worker safety under COVID-19.
A Light at the End of the Tunnel in America
Many domestic solar energy companies in America have pessimistically predicted a decline in future demands by 5% to 30%, prompting them to recalculate financial projections for 2020. Some companies, however, are taking a different approach. Companies like Sunrun and Vivint Solar are ditching the traditional face-to-face business approach and are instead digitizing their sales and services. They are also making adjustments to quickly adapt to the new normal, such as using drones to complete roof measurements and simplifying the installation process, all while ensuring zero contact to maximize safety.
Also, now that the Internet is now an integral part of our everyday lives, maintaining a steady level of electricity is becoming a vital necessity. People are starting to think about the importance of owning their own energy to prepare for unpredictable disasters, such as wildfires in California and various other large-scale power outages. If grid repairs are slow due to stay-at-home policies, concerns about the speed of recovery could drive the U.S. household solar market post-pandemic. According to a report by PV Magazine (March 2020), demand fueled by concern about uncertainties such as wildfires and COVID-19 caused Australian solar sales to rise 41% in March.
China's Speedy Recovery
China started reopening factories and supply chains began to gradually recover in mid-February. Coupled with an unchanged agenda from the Chinese government for their clean energy initiative, Chinese demand for wind turbines does not seem to be affected by the epidemic. Previously approved wind power projects are still proceeding according to their original plans, and the time lost due to the epidemic is being recovered little by little. Goldwind Technology, one of top ten wind turbine manufacturers in the world, announced that dozens of its projects have resumed. This includes the first-phase construction of the much-anticipated Yangjiang Wind Power Base Project, and they state that the base will be up and running by July 2020.
Although COVID-19 may cause the global economy to slow down for the near future and will affect construction of new renewable energy projects for the next few months, there are signs that this is a minor speed bump with limited effect. Taking into the account the irreversible trend of long-term carbon reduction along with the EIA’s predictions, renewable energy will account for the largest proportion of new power-generating capacity for the U.S in 2020 with an increase of 11%. Soon, renewable energy will no longer be in the dark, but will come out into the light.