Saturday, Aug 8, 2020
International Finance
Energy Exclusive

Coronavirus pandemic to severely impact the renewable energy sector

Renewable energy coronavirus
China alone supplies more than 50% of solar equipment to the world

The first case of coronavirus was reported in the Chinese city of Wuhan last year, and since then, more than 150 other countries have reported positive cases of the virus. To curb the spread of the deadly pathogen, many countries have entered into a state of lockdown, sealed borders and restricted travel. This has resulted in a major disruption in the global supply chain network across various sectors including renewable energy. China, where the outbreak took place, supplies more than 50 percent of the renewable energy equipment to the world. Major producers of renewable solar equipment such as Trina Solar, Yingli, Hanwa, Jinko Power and Rene Solar are all based in China.

China also dominates the market when it comes to wind energy equipment.  Many countries in Southeast Asia and the Middle East are dependent on China for wind energy equipment. China-based wind equipment suppliers such as GE, Siemens, Xinjiang Goldwin, and others have faced production shutdowns due to the  pandemic. This has resulted in disruptions in supply chain which has inversely resulted in shutting down of projects in other parts of the world. Many countries in Europe, as well as the US, are heavily dependent on China for renewable energy components. The failure to meet demand is expected to severely impact the global renewable energy sector.

The International Monetary Fund (IMF) said that the pandemic has already pushed the global economy into a recession. The fund even warned that the repercussion could be more severe than the financial crisis in 2008. The Solar Energy Industries Association (SEIA) predicts that the solar sector could lose up to 120,000 of its nearly 250,000 jobs—approximately half of its workforce—in the face of this crisis. In light of the ongoing recession, many fear that investments in renewable energy could take a back seat because renewable energy is expensive compared to other energy sources such as fossil fuel. Governments might begin to prioritise rebuilding of their economies in the pursuit of clean energy.

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