Page 12 - AfrElec Week 13

AfrElec RENEWABLES AfrElec
Renewables growth set to be lost in 2020
GLOBAL
THE previously ambitious growth forecasts for solar and wind for 2020 now face being wiped out by the coronavirus’ (COVID-19) devastating impact on global power demand.
A surging US dollar could now put growth at zero for 2020 and even reduce additions by 10% in 2021.
Analysis from Rystad Energy found that green projects in Australia, Brazil, Mexico and South Africa faced the deepest impact, as capital costs could rise by up to 36% as local currencies fall.
“The foreign exchange impact will decimate the 2021 outlook for solar installations and the outlook from 2022 and beyond for wind installa- tions, as orders for new equipment will halt from currency-hit emerging countries, which would otherwise account for much of this growth,“ said Rystad Energy’s product manager for renewa- bles, Gero Farruggio.
In detail, Rystad said that 140GW of solar and 75GW of wind could be added in 2020; however, the impact of COVID-19, not only on power demand but also movement restrictions that will hold back construction timetables, would mean growth would fall back to 2019 levels of 126GW for solar and 71GW for wind.
Further ahead, Rystad predicted that a fall in FIDs and the strengthening US dollar would reduce project commissioning by 20GW, or 10% down on 2020.
China had predicted it would add 40GW of
solar capacity in 2020, and Rystad noted that despite an initial fall because of COVID-19, fac- tories had returned to work quickly, and com- ponent deliveries have been affected less than thought.
Indeed, China and the US are forecast to be least affected by exchange fluctuations, although Beijing is unlikely to meet its 40GW target.
“Countries most impacted in this sector will be from emerging markets in Asia, the Middle East, India and Latin America, where the bulk of solar growth had previously been expected,“ says Farruggio.
Europe’s 20GW of forecast additions in 2020 will be mainly be under threat from travel restrictions, which have halted many projects under construction.
Solar in India is anticipated to be affected, as it is reliant on imports from China, putting its 5.8GW of new capacity at risk.
On the other hand, its 1.7GW of new wind could be safer, as the country is more self-suf- ficient in terms of turbine production than for solar PV panels, Rystad said.
Australia could meet its 2GW solar target, as most projects are well advanced, although this would depend on grid connections. Its 1.8GW target for 2021 is more at risk.
The country’s 4.5GW of wind turbine capac- ity that is committed is still expected to come online between 2020 and 2021. ™
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Week 13 02•April•2020