Unless the Coronavirus outbreak is contained soon, its aftereffects will continue to cascade across industries and the renewable energy industry is not immune to this effect
Solar power developers who rely on Chinese suppliers for solar panels, modules and other equipment are facing a situation wherein delivery of this itinerary has been delayed no thanks to the Coronavirus outbreak that is rampant in China and has created turmoil world over. Just as various other industries that rely on China for raw materials and other products, the Indian renewable energy sector has been dependant on China for various parts that are essential to the establishment of a solar power project.
Due to holdup in equipment supply, various developers in India are envisioning delay in commissioning dates for their projects. Although India has been focused on indigenous manufacture of solar cells and modules to promote ‘Make in India,’ the manufacturing infrastructure is still a work in progress, and India still relies to a large extent on Chinese products for renewable projects. The recent Coronavirus outbreak seems to be a hindrance in this regard. China accounts for around 78% of solar cells and modules that are imported into India.
The Ministry of New and Renewable Energy (MNRE) has announced that the delay due to the 2019-nCoV (Coronavirus 2019) outbreak will be looked at as a force majeure event. The MNRE intends to provide assistance in the form of relief to developers that are directly affected by this deadly outbreak. Apart from shipment postponement, the potential closure of various manufacturing units in China may even drive up the costs of modules and cells, thus impacting the overall costs of projects in India. The Indian government has set a target of achieving 175 GW of renewable energy capacity in the country by 2022. Of this, 100 GW has been allocated to electricity from solar projects. This target seems bleak at the moment considering the impact of the COVID-19 (Coronavirus disease 2019) and other factors that were already present before the outbreak of the virus.
This apart, wind energy projects in China face potential issues due to a delay in wind turbines, according to a research firm, Wood Mackenzie. The firm estimates that production delays in the wind turbine supply chain will decrease wind energy installations in China by 10% to 50% in 2020. To add to the predicament, already existing issues such as bottlenecks in generator and convertor supply will exacerbate the delays in production and commissioning. Unless the Coronavirus outbreak is contained within the next two months its aftereffects will continue to cascade across industries and the renewable energy industry is not immune to this effect. The outbreak has stalled wind turbine production in China, and the travel restrictions have imposed an impediment to component supply.
The next few months are crucial for the renewable energy industries in two of the most densely populated countries in the world. Let us hope that measures to contain the COVID-19 outbreak are stringent and more aggressive than the virus itself, so the renewable industry can bounce back and regain traction in the ensuing months.
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