The coronavirus outbreak is slowing the transition to renewable energy as aggressive measures taken by China to slow the spread of the virus is leading to shortages of everything from solar panels to wind turbines.
Quarantines, closed factories and supply chain disruptions are preventing business as usual and reducing the availability of everything from iPhones to wedding dresses, and the renewable energy sector isn’t immune. Most of the effects on renewable energy have been confined to areas in China where the virus was first found. China has been installing the newest wind and solar farms and producing the bulk of panels used globally.
Still, overseas manufacturers depending on Chinese components might face delays, Bloomberg News reported.
“If the virus outbreak lasts beyond the first quarter and spreads to more geographies, as is currently happening in Korea and Italy, then it may very well slow down global renewable energy deployment,” said Ali Izadi-Najafabadi, head of analysis in Asia for BloombergNEF, which has downgraded its outlook for installations this year.
BNEF cut its forecasts for solar and wind installations in China in 2020 but added that capacity could climb quickly after the outbreak and that disruptions won’t reverse an oversupply.
Coronavirus-related production delays may reduce wind-turbine installations by between 10% and 50% this year, according to Wood Mackenzie. The U.S. is expected to feel the impact more than other markets outside of China because the industry is already suffering from supply bottlenecks. Utilities have been rushing to build wind-power infrastructure in 2020 to take full advantage of tax credits.
“In a best-case scenario, the epidemic is contained and production resumes by the end of March,” Wood Mackenzie senior consultant Xiaoyang Li said. “In a bear-case, the epidemic could continue to impact the supply chain well into the middle of the year.”
China is also the world’s leading lithium-ion battery producer. Utility Dive wrote that Wood Mackenzie estimates that the country’s battery production capacity could drop by 10% from earlier forecasts for 2020.
- The developer of Wisconsin’s first large-scale solar farm warned that the coronavirus outbreak may lead to delays and higher prices.
- India’s government said solar developers who miss deadlines due to coronavirus-related supply disruption can use force majeure clauses to avoid financial penalties. An industry lobby said that around 4 gigawatts of solar could be affected by the shortages.