In five markets analysed by IHS teams -- China, Italy, India, South Korea and PJM in the US -- coal-fired power generation in the lockdown periods dropped. A year-on-year decrease of 9% has been seen in China in January-February. Тhere was a 20% drop in India in March and the first half of April. Тhe plunge in PJM coal power has reached 40% in March and April.
In these same five markets, solar generation volumes increased, in some by up to 45%. In three, natural gas-fired power generation was also higher than a year earlier as gas is outcompeting coal.
The chart shows the year-on-year change in power generation by coal, natural gas and solar power plants in these five countries, based on IHS Markit’s analysis.
Figure 2: Year-on-year change in power generation volumes during COVID-19 lockdowns (2019-20)
These changes in power generation due to the lockdowns are a result of different factors in the local markets such as the growth in installed solar capacity, priority dispatch for renewables, a drop in gas prices, and different government subsidies and restrictions.
Xizhou Zhou, VP and Global Managing Director of power and renewables at IHS Markit, says the lower demand and lower power prices in many markets are likely to outlast the coronavirus pandemic itself. Merchant projects, including renewables, will feel significant pressure due to the combination of supply chain and permitting delays and depressed electricity prices. Securing financing is no longer that easy and delays of projects planned to go live in 2020-2021 are now expected.