Up to 3 GW of wind and solar projects in Australia could be delayed or even scrapped following the COVID-19 health crisis and its impact on the local economy, Norwegian consultancy Rystad Energy says.
The energy analyst explained in a recent report that the coronavirus pandemic has hit the local currency and thus increased capital investments needed for the development of renewable energy projects, making some of them no longer viable.
While 530 MW of solar photovoltaic (PV) and 210 MW of wind projects have achieved financial close and have or will enter construction this year, the bulk of projects may be doomed not to reach this stage. The Norwegian group’s previous estimates, announced at the start of 2020, were that between 2 GW and 3 GW of renewable energy schemes will reach financial close or will enter construction throughout the year, including 1.1 GW of wind and 1 GW-2 GW of solar PV.
“COVID-19 has hit the Australian Renewables industry hard [..],” Rystad said. According to it, the state of New South Wales will take the heaviest blow as around 65% of all solar and 67% of wind projects that were expected to move into construction this year are located there. On the solar front, the companies that will be most impacted include UPC Renewables Australia, France’s Neoen (EPA:NEOEN), Wollar Solar and Canadian Solar (NASDAQ:CSIQ), while Tilt Renewables Ltd (NZE:TLT) and the local arm of China’s Xinjiang Goldwind Science & Tech Co Ltd (HKG:2208) are among those expected to take a hit in the wind sector.
Rystad noted the Australian renewable energy industry already faced a bunch of grid challenges in 2019 that slowed the pace of new projects. As the trend continued into the first quarter of 2020, construction commenced on less than 400 MW of projects.
“With the additional challenge of COVID-19, the pace of construction has only slowed further since the end of the first quarter and developers now face a quagmire of infrastructural and economic obstacles,” Rystad said.