Page 7 - AfrElec Week 12

AfrElec COMMENTARY AfrElec
deeper and more holistic regulatory and invest- ment environments that would accelerate the growth of wind energy and meet climate targets.
It called for greater use of emerging tech- nological solutions such as hybridisation and green hydrogen to open new opportunities for the sector.
However, in terms of climate change, this expansion is not enough. The report warned that the rate of growth was still too slow, saying that 100 GW per year was needed until 2030 and 200 GW from 2030 to meet the 1.5°C pathway called for by the Paris Agreement.
Disruption
The coronavirus pandemic will disrupt global supply chains and project execution in 2020, the GWEC said, although it said it was too soon to offer any predictions.
Wood Mackenzie said in its note cutting its 2020 wind additions outlook by 4.9 GW to 73 GW that the potential impact on global instal- lations remained most significant in China and the US. There, wind-focused policy deadlines had been expected to deliver record volumes of capacity additions.
“Industry stakeholders are continually adapt- ing business operations to balance worker safety with the needs of their clients, all while com- plying with dynamic government containment measures,” Wood Mackenzie said.
“The wind energy supply chain is truly global in nature, with a higher level of diversification than solar, and thus the impact of China’s coro- navirus shutdown on Western markets has been managed by leveraging established supply lines
from India, Brazil, Mexico and other major pro- duction hubs,” the note added.
All is not lost
Yet Wood Mackenzie also noted that all was not lost for the wind sector and renewables in general.
On the one hand, the economic downturn is hitting demand for power, the reliability of supply chains and the availability of financing, thereby threatening to put a brake on investment in renewable energy.
However, chaos in the oil market could end up actually being good news for renewable energy, said Wood Mackenzie analyst Valentina Kretzschmar.
“Capital allocation is no longer a one-way street for Big Oil,” she wrote. “Renewables pro- jects suddenly look as attractive as upstream projects at $35 a barrel.”
Put another way, the rates of return offered by solar and wind projects can now compete with oil and gas projects given the falling oil price.
Meanwhile, Fatih Birol, IEA executive-direc- tor, stressed that governments now had “historic opportunity,” to invest in renewables and to put green energy at the heart of post-crisis stimulus plans.
One ray of light is the performance of solar power in China in January and February. While overall generation fell 8.2%, according to official Chinese statistics, solar output rose by 12%.
The global wind sector may be seeing its rapid expansion falter in the short term, but govern- ments, utilities and investors could use the crisis to invest more in renewables™
One disappointing region was Africa and the Middle East, which saw new installations fall by 2.6% to 944 MW
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