Is COVID-19 Going to Diminish Renewable Energy or Pave the Way for a New Beginning?

COVID-19 has caused a slowdown or halt in production worldwide, affecting supply chains, and travel restrictions have greatly reduced the workforce available for assembly and deployment tasks. These challenges will inevitably impact renewable energy initiatives globally. Additionally, the economic downturn led by the pandemic has resulted in a sharp decline in crude oil prices. In response, oil companies have begun cutting expenses, including investments in renewable energy, to safeguard their existing investments in oil and gas. The U.S. Energy Information Administration (EIA) has forecasted that U.S. wind and solar capacities will fall short of initial expectations by 5% and 10% respectively. Is this an indication of a bleak future for renewable energy, or is there still a ray of hope?

Pragmatic Positivity in Europe

Facing the challenges posed by COVID-19, renewable energy manufacturers in Europe have chosen to respond with courage. Major wind turbine manufacturers like Siemens Gamesa and LM Wind Power have temporarily closed their nacelle and blade factories to protect their staff in light of the pandemic. Despite this, the overall productivity of the entire European renewable energy sector remains at 96% capacity.

Leading Danish green energy firm Ørsted has stated that it will stick to its original financial forecast for 2020 as their wind farm construction plans remain unaffected. Moreover, under the shield of feed-in tariffs and prioritization policies, revenues generated by operational wind farms are holding steady despite the virus. The solar energy industry has followed a similar path in response to the pandemic. For instance, a large-scale solar power installation in Texas, which secured financing in March, continues its operations to prevent the loss of feed-in tariff agreements by adapting work processes to enhance worker safety during COVID-19.

A Glimpse of Hope in America

Several domestic solar energy companies in America have pessimistically projected a decline in future demand ranging from 5% to 30%, leading them to reassess their financial forecasts for 2020. However, some companies are taking a different approach. Businesses like Sunrun and Vivint Solar are abandoning traditional face-to-face interactions and opting for digital sales and services. They are also swiftly adapting to the new normal by utilizing drones for roof measurements and streamlining the installation process, ensuring minimal contact to maximize safety.

Given the growing significance of the Internet in our daily lives, maintaining a consistent electricity supply is becoming crucial. People are recognizing the importance of self-sustaining energy as a preparation for unforeseen calamities like California wildfires and other large-scale power failures. In case grid repairs are delayed due to stay-at-home directives, concerns about recovery time might boost the U.S. residential solar market post-pandemic. An increase in demand triggered by worries about uncertainties such as wildfires and COVID-19 drove Australian solar sales up by 41% in March, according to a report by PV Magazine (March 2020).

Swift Rebound in China

China commenced reopening factories by mid-February, leading to a gradual recovery in supply chains. Coupled with the Chinese government’s unwavering commitment to their clean energy agenda, the demand for wind turbines in China appears unaffected by the epidemic. Pre-approved wind power projects are progressing as planned, with lost time due to the epidemic being gradually recouped. Goldwind Technology, one of the top ten wind turbine manufacturers globally, has resumed work on dozens of its projects. This includes the initial phase of the highly anticipated Yangjiang Wind Power Base Project, scheduled for full operations by July 2020.

While COVID-19 might temporarily slow down the global economy and impact the construction of new renewable energy projects in the coming months, indications suggest that this is a minor setback with limited repercussions. Considering the irreversible trend towards long-term carbon reduction and the EIA’s forecasts, renewable energy is projected to constitute the largest share of new power generation capacity in the U.S. in 2020, with an 11% increase. Soon, renewable energy will emerge from darkness and step into the light.