Market researcher Wood Mackenzie has trimmed its forecast for
global wind installations in 2020 by 6.5 percent, or 4.9 gigawatts,
as the industry grapples with the immediate and longer-term
implications of the
Shuttered manufacturing capacity, closed borders and the threat
of canceled or postponed tenders all play a part in the downgrade,
which could hit major European markets hardest. WoodMac now expects
the world to add 73 gigawatts of new wind capacity in 2020, still a
solid jump from the 62 gigawatts built in 2019.
“The impact of the coronavirus is top of mind for the global
wind industry and embodies a crisis unlike anything the market has
even seen,” wrote Dan Shreve, Wood Mackenzie’s head of global
wind energy research and lead author of the latest report.
“The state of the pandemic is evolving on an hourly basis,
resulting in a highly reactionary environment. Industry
stakeholders are continually adapting business operations to
balance worker safety with the needs of their clients, all while
complying with dynamic government containment measures,” added
Supportive policy moves were likely to enable the shifting of
projects into 2021 without penalty, rather than offering new routes
to market. Germany, for one, has confirmed it will waive penalties
for delayed projects.
“In the months to come, there may be a more concerted effort
to weave renewables policies into more sweeping omnibus bills aimed
at providing fiscal stimulus in the countries hit hardest by the
pandemic,” said Shreve.
Europe may be hit hardest
Driven by booming demand in China and the U.S., where developers
face declining subsidies, wind developers placed a record
100 gigawatts of turbine orders last year. Yet while the
world’s top two wind markets may take the biggest hit in terms of
megawatts, in percentage terms there could be greater pain in
Italy, France and Spain, with aggressive lockdown measures now in
Shreve noted that factory closures in those top European markets
were also beginning to have an effect. The most severe impacts of
that are likely be felt in Europe and potentially the U.S.
The global nature of the wind supply chain is likely to limit
the impact. Indeed, U.S. EPC firms have told Wood Mackenzie that
they have not seen any supply chain problems thus far.
Siemens Gamesa and LM Wind Power’s blade factories in Spain
are both closed for cleaning after identifying positive cases of
COVID-19. WoodMac warned that the current predictions for downtime
could be measured in months not weeks if the virus continues to
accelerate its spread.
Shashi Barla, Wood Mackenzie’s principal analyst for global
wind supply chain and technology, told GTM that China had lost
between six and eight weeks of production.
“Most companies will be running one or two eight-hour shifts
per day. One option could be to increase this, to work two shifts
instead of one or even 24 hours per day, if necessary, to
compensate for the volume that’s been jeopardized,” Barla
Workforce shortages outside the major wind markets
Outside the established markets there is a greater reliance on
overseas expertise. That means markets like Norway, with a strong
project pipeline for 2020, are vulnerable to skills shortages as
“Norwegian officials have already rung the alarm bell due to
an inability for foreign project teams to enter the country,”
“This same issue is being flagged for concern in African
nations, though the build volumes in most countries are so small as
to allow for time to get projects completed before year-end if
coronavirus containment measures are successful,” added
A greater challenge in Africa could be the delay or cancellation
of tenders. South Africa was scheduled to hold a renewables tender
in Q2 with onshore wind and solar among the technologies vying for
1,800 megawatts of capacity.
Source: FS – GreenTech Media
WoodMac Trims Global Wind Energy Forecast as Coronavirus Ripples Across Markets