The short-term prospects for wind and solar power look rocky amid the economic upheaval of the coronavirus. But long term, renewables could emerge stronger than ever, especially if governments integrate support for clean energy into Covid-19 economic-recovery programs.
Before the Covid-19 pandemic hit, renewable energy was growing steadily — but still not fast enough to meet the Paris Agreement’s carbon reduction goals, let alone to make the further strides needed to keep climate change from spiraling out of control.
Now, the virus-induced economic shock is likely to slow the expansion of wind, solar, and other clean power sources, at least temporarily, experts say. But while lockdowns, social distancing requirements, and financial uncertainties have put some new projects on ice, the underlying strengths of renewables remain strong, and analysts expect their economic advantage over volatile fossil fuels will only increase in the long term.
Whether the pandemic ultimately puts clean energy on a faster track than before, though, depends to a large extent on the choices political leaders make now, analysts say. Which means 2020 is shaping up to be a pivotal moment for renewables — and the world’s hopes of checking warming.
Leaders must seize the opportunity to design economic recovery packages so they accelerate a shift toward wind and solar power, rather than propping up the fossil fuel economy, said Francesco La Camera, director-general of the International Renewable Energy Agency, an intergovernmental body.
“The only thing we have to be afraid of,” he said, “is that governments can be pushed by lobbyists to bail out sectors that belong to the past. And this is the real danger.”
As shutdowns aimed at stemming the viral spread have caused global energy demand to plummet, renewable sources have accounted for an increased share of power generation. That is in part because the low cost of solar and wind power means they are often dispatched to grids before other sources such as coal and nuclear power. The huge drop-off in demand, for both electricity and transportation fuels, has also pushed oil and gas prices to historic lows, and left fossil fuel companies struggling to find storage space for huge gluts of product.
In the short term, however, analysts say that the global economic fallout from the pandemic will almost certainly also be a drag on the growth of renewables. Stay-at-home orders halted production at factories making solar panels and wind turbine parts, and shipping delays have exacerbated supply problems. Construction on some big arrays stopped, and social distancing requirements have forced home solar companies to postpone rooftop installations and sales visits.
“The industry needed installations to be speeding up rather than slowing down at this point” for countries to bring carbon-cutting realities into line with their promises under the Paris Agreement, said Logan Goldie-Scot, head of clean power research at analysis firm BloombergNEF (BNEF). “Anything that makes that gap bigger is hugely problematic from an emissions perspective.”
BNEF has scaled back its projections for 2020 installations by 12 percent for wind and 8 percent for solar, compared to what it anticipated before the pandemic. Renewables growth has been steady in recent years, and last fall, the International Energy Agency (IEA) predicted the world’s renewable power supply would grow by 50 percent over the next five years, adding new power generation equivalent to the entire existing electricity capacity of the United States.
“We were expecting a boom year” in 2020, said Heymi Bahar, the IEA’s senior renewables analyst. “So this becomes very bad timing.”
The bigger question, experts say, is what happens as countries reopen. With cash tight, and economic troubles expected to keep energy demand below pre-Covid-19 levels, new wind and solar projects may find financing hard to come by.
Auctions in which companies bid to build such projects have been postponed. Altogether, more than 40 percent of wind and solar capacity that was scheduled to be commissioned from April to the end of this year has been delayed, said Goldie-Scot. “That’s an immediate setback.”
Home solar took a bigger hit than utility-scale projects. Those rooftop sales are likely to continue struggling, as the slowdown forces homeowners and small businesses to restrict spending on big-ticket items like solar arrays, even if, in the long run, they generate substantial savings.
Still, analysts agree the renewable energy sector’s fundamentals are strong. A lot has changed since the last global meltdown, the financial crisis of 2007-08. Technologies have matured and prices dropped, to the point where renewables in most cases provide cheaper energy than fossil fuels. Battery storage, key to making clean power steady and reliable, is improving rapidly.
“Renewable generation sources have become extraordinarily competitive from an economic standpoint,” said Dan Shreve, head of global wind energy research at consulting firm Wood Mackenzie. “It’s a terrific story. Do we expect any of that to change in the near term? No, I don’t think so.”…read more
Fuente: e360 yale