Coronavirus drives wind market downgrade

25 March 2020

Sian Crampsie

The coronavirus pandemic is expected to have a widespread impact on the global wind energy sector, analysts say.

Wood Mackenzie has reported that global wind additions will decline by 4.9 GW in 2020 compared to previous projections, with impacts most likely to be felt in the USA and China. Total forecast additions for 2020 is now expected to reach 73 GW, it said.

Dan Shreve, Wood Mackenzie’s Head of Global Wind Energy Research, wrote in an online post that the coronavirus crisis was “unlike anything the market has ever seen”, with industry stakeholders forced to continually adapt business operations to comply with government containment measures and ensure worker and client safety needs.

According to Wood Mackenzie, European Tier I wind energy markets, such as Spain, France and Italy, could be hit even harder on a percentage basis due to more aggressive lockdown measures inhibiting worker mobility. Production in those countries is also starting to suffer with factory closures due to coronavirus infections.

However, the global nature of the wind energy supply chain means that suppliers have been able to leverage capacity in India, Brazil, Mexico and elsewhere to limit the impact of China’s production shutdown. “Both production and construction in the China market are recovering rapidly with local governments now encouraging local facilities to return to work as the outbreak is believed to be under control,” Shreve said.

Risks remain, particularly in Europe, where factory closures will likely result in turbine installation delays, both domestically and possibly for the US.

So far Spanish wind turbine blade plants from LM Wind Power and Siemens Gamesa have closed production.

According to Wood Mackenzie, the long-term power market impact of the coronavirus will be muted if Western countries can contain the virus in a similar timeframe to China and South Korea. However, the bigger concern for wind demand lies in the potential delay or cancellation of new auctions and tenders, it added.

 



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