Covid-19 to Wreck Economics of New Solar, Wind Projects
By Marija Maisch
Movements in the foreign-exchange market triggered by the Covid-19 outbreak will affect all segments of the renewables market. According to Norwegian consultancy Rystad Energy, solar and wind projects will be particularly affected, as companies choose to pause development by contracting key components, which are typically procured in US dollars.
The consultancy’s grim analysis shows that plans to commission new solar and wind projects will be delayed this year and cut by an additional 10% next year. Renewables projects in Australia, Brazil, Mexico and South Africa will be particularly affected, as installations now in the procurement phase could face capital cost increases of up to 36% due to the rapid depreciation of local currencies.
Before the coronavirus outbreak, Rystad Energy expected 140 GW of PV and 75 GW of wind capacity to be built in 2020, for a year-on-year increase of 15% and 6%, respectively. However, these projects will now be delayed due to government restrictions on movement that will affect construction time frames.
Photo courtesy of Dana Smillie.