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WoodMac lowers 2020 wind forecast due to coronavirus

Wind farm in Italy. Author: Raffaele Esposito. License: Creative Commons, Attribution 2.0 Generic

March 25 (Renewables Now) - Due to the impact of the novel coronavirus and its spread, Wood Mackenzie on Tuesday cut its forecast for global wind installations this year to 73 GW, a reduction of 4.9 GW, and said delays in auctions in various markets could be expected.

In megawatt terms, a significant drop in capacity additions is expected in China and the US. On a percentage basis, major European wind markets are forecast to experience an even greater decline.

The US and China were expected to install record volumes in 2020 due to policy deadlines. An extension of the tax credits for wind in the US, and postponement of China’s feed-in tariff (FiT) deadline are now being considered. Such moves could result in a shifting of installations from 2020 into 2021 without penalties, but not in an overall increase of installation projections for 2020-2021, WoodMac said.

In Europe, aggressive lockdown measures are limiting worker mobility. Installations are expected to be lower in major wind markets like Spain, France and Italy, which have been hit hard by the pandemic, but construction schedules are also being threatened in markets like Norway, where foreign project teams have been unable to enter the country.

PLANTS CLOSING

WoodMac further warns that the closure of production facilities in countries like Spain because of the coronavirus may result in turbine installation delays in Europe and possibly in the US. Australia also has a lot of projects for completion this and next year, which will use turbines imported from Europe.

“Spanish wind turbine blade plants from LM Wind Power and Siemens Gamesa are shutting down production. Although the stated downtime is measured in weeks, it may take months if the rate of infections in Spain continues to rise,” WoodMac head of wind research Dan Shreve says in the Tuesday update.

H1 TENDERS

The market research firm says the bigger concern for wind demand now lies in the potential delay or cancellation of auctions and tenders.

The launch of South Africa’s next round of auctions, planned for the second quarter of 2020, now seems unlikely as certain developers have put on hold their feasibility studies because of travel restrictions, WoodMac said. Governments in Poland and Ukraine, which also had plans to hold auctions in the first half of the year, are now busy with the COVID-19 pandemic. Chile is also seen to postpone its next auction. 

The full update is available at https://www.woodmac.com/news/opinion/how-the-coronavirus-crisis-is-driving-global-wind-market-downgrade/.

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Browse all articles from Tsvetomira Tsanova

Tsvet has been following the development of the global renewable energy industry for almost nine years. She's got a soft spot for emerging markets.

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