The coronavirus outbreak is expected to lead a major global crisis on the green economy including: renewables, energy storage, electric vehicles, heating, cooling, and the circular economy – according to recent analyses.
A new BloombergNEF(BNEF) report downgraded growth forecasts for global solar and battery sectors this year due to the suffering of markets impacted by the fallout from the escalating pandemic. The research has shown the projected global solar demand for 2020 decreasing from 121-152GW to 108-143GW. This could make 2020 the first year of declining solar capacity since at least the 1980s. However, the global wind industry could fare somewhat better, thanks to tighter delivery and construction schedules and specialized equipment often rented for a more limited period of time, BNEF said.
A 16 percent reduction in global solar energy demand is projected for 2020 due to the sector’s heavy dependence on demand in China where strict restrictions on movement and commercial activity are being put in place in an attempt to stop the spread of the virus. The International Energy Agency (IEA) said in a recent report the crash of oil prices may challenge the plans by oil and gas (O&G) giants to finance a shift to renewables. The ability of these firms to spend in all areas – including renewable energy – could be hampered if COVID-19 continues to drive down oil revenues.
For wind, researchers see “considerable downside risk” to their prior forecasts for new wind installations of 75 gigawatts of new capacity, but still expect a record year. The amount of the drop will depend on how fast Chinese suppliers resume full production and the duration of construction delays. But the global installed capacity would be impacted by a significant decrease in the capacity installed in China which has the largest installed wind power capacity, registering more than 230 gigawatts (GW) and contributing more than 35% of the global installations.
The collapse of the oil price due to virus-related transport restrictions may lead to lower demand for electric vehicles. Analysts are pointing to lower oil prices as a factor in Tesla’s shares falling last week. The epidemic also forced temporary closures of Tesla’s new Shanghai car plant and stores throughout China. The global EV market is also impacted by the canceling of showcase events due to Covid-19. As a result, battery sales would be reduced.
But there are also hopeful signs. For instance, the analyses are showing a “minimal” effect on the offshore wind sector outside of China. And BloombergNEF expects EV sales to “weather the storm better than sales of internal combustion vehicles.”
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