Page 11 - AsiaElec Week 15

AsiaElec RENEWABLES AsiaElec
3GW of green capacity at risk in Australia in 2020
AUSTRALIA
THE global COVID-19 pandemic could cause up to 3GW of wind and solar projects in Aus- tralia to be put on hold.
Financial closure for up to 3GW of capacity could be postponed or cancelled, mainly because of the falling Australia dollar, which has plum- meted 20% against the US dollar since the start of January, Rystad Energy said in a note.
The weaker currency has pushed up capex for both utility PV and wind projects, making once viable projects no longer economical.
New South Wales will be the biggest loser, as 65% of solar PV and 67% of wind projects that are expected to reach financial close, but have not yet done so, in 2020 are located in the state.
Utility PV companies most affected include UPC, Neoen, Wollar Solar and Canadian Solar, while Tilt and Goldwind will be most affected in the utility wind segment.
Coronavirus (COVID-19) adds to the grid challenges faced by renewables projects in 2019, Rystad said, such as network capacity availabil- ity, commissioning issues, Marginal Loss Factors (MLF) and system strength variability.
This meant that ground was broken for con- struction for only 400MW of projects in the first quarter. With the additional challenge of COVID-19, the pace of construction has only slowed further since the end of the first quarter and developers now face a quagmire of infra- structural and economic obstacles.
The note found that the majority of capital expenditure for utility PV and wind assets is for
hardware, comprising about 60% of expenses for PV and 75% for wind.
As hardware is typically priced in foreign currency, the plummeting value of the Austral- ian dollar has had a substantial impact on project economics.
Meanwhile, power purchase agreement (PPA) pricing, which had previously fallen along with capex, will not rise as capex has risen in 2020.
Rystad also warned that developers could have more difficulty in securing affordable loans to fill short-term cash needs, given that cash is now a scarce commodity.
Given these problems, Rystad noted that only 530MW of PV capacity and 210MW of wind had made financial close in 2020, and had neither already begun construction or would do so this year.
The impact of COVID-19 on project eco- nomics will likely delay or cancel the financial close of the remaining projects, leading to up to 3GW of capacity being delayed in 2020.
At the end of March, Rystad said in a separate note that both declining demand for electricity, initially forecast at around 15%, and a surging US dollar could now put global solar and wind growth at zero for 2020 and even reduce addi- tions by 10% in 2021.
It said that green growth would fall in 2020 to 2019 levels of 126GW for solar and 71GW for wind, rather than the previously forecast 140GW of solar and 75GW of wind for this year.™
Ørsted positive about offshore wind in Japan
P
ØRSTED CEO Matthias Bausenwein remains hopeful that the COVID-19 pandemic will not affect the company’s plans for Japan’s emerging offshore wind industry, but still retains fears that some auctions and projects could be delayed.
“The pandemic will not influence investment decisions and general confidence in offshore wind, but it could delay the projects’ timeline,” Matthias Bausenwein, president of Ørsted Asia-Pacific, told Reuters.
“We hope that we won’t see any major delays,” he said.
Bausenwein said that the country’s state of
emergency, announced on April 14 by Prime Minister Shinzo Abe, had not affected the com- pany’s offshore wind projects.
Ørsted in March created a joint venture with Japanese generator TEPCO that would bid in Japan’s first offshore wind tender. The new com- pany, 51%-owned by TEPCO, aims to win off- shore rights near the city of Choshi near Tokyo.
“We see that there is a momentum in Japan’s wind power market finally,” he said.
The government in 2019 put in place its new auction framework, making it easier for foreign investors to enter the sector, which until now
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