Until recently, Windpower Intelligence foresaw around 62.5GW of wind capacity being added globally in 2020. But the impact of the coronavirus outbreak has changed all that, forcing a reassessment of near-term capacity growth prospects. Now, we expect to see only 58.4GW of new wind capacity coming online this year. This compares with 60.4GW added globally in 2019.
As of early April, around four billion people — half of the world’s population — are in lockdown, restricting their movement to a greater or lesser extent and preventing many from going to work. Among them are plenty of people employed in the wind sector, its supply chain and associated services. And the long list of affected countries and regions includes most of the major global wind markets, not least China, India, the US and western Europe.
Offshore work continues
To date, the offshore sector appears to be largely unaffected. Indeed, Ørsted reported at the end of March that all its construction projects were progressing according to plan. While travel restrictions and quarantines — if prolonged — could impact the delivery of components, we currently foresee little or no impact on offshore-capacity growth prospects and have not yet altered our forecasts.
Onshore, the picture is starkly different. Vestas, for example, reported that the various national measures implemented to contain the virus had caused disruptions to its manufacturing and supply chain and hit installations. And it is far from the only major player in the wind sector to have been affected.
China bears the brunt
Reflecting China’s status as the first country to be significantly impacted by the coronavirus outbreak, WPI revised its incremental capacity forecasts for the world’s leading wind market a month ago. We expect to see just under 19GW of onshore capacity being added in China this year, down from 20.5GW in February. We have now downgraded our 2020 incremental capacity forecasts for many other countries in the Asia-Pacific region, too.
India’s lockdown is country-wide, applies to 1.3 billion people and is affecting nearly all sectors of the economy. For the wind industry, the lockdown is hitting labour supply, deliveries and installation rates and delaying likely commissioning dates. WPI now expects to see 2020 capacity additions in India of 3.2GW, around 500MW down on earlier expectations.
Our forecast for 2020 incremental capacity in Australia has been similarly revised, and we now expect to see 1.6GW added this year, down on the 1.8GW forecast previously.
In New Zealand too, the lockdown has forced a halt to construction work with delays to commissioning expected.
In contrast, Japan’s response to the virus has so far been light touch and focused largely on Tokyo and a few other prefectures. We currently foresee no significant impact on the pace of Japanese wind farm installation this year and have left our 2020 incremental capacity forecast unchanged.
Disruption in Europe
In much of Europe, the situation has deteriorated sharply in the past month, with Covid-19’s spread being met with national and regionally imposed lockdowns of varying degrees of severity. The economic consequences will be significant, and the countries most impacted include several of Europe’s key wind markets: Spain, Germany, France and the UK.
In each case, the supply chain, labour availability and construction activity have all been affected. Siemens Gamesa Renewable Energy (SGRE) and Vestas, for example, were forced to halt production at their Spanish facilities at the end of March, as a government order banning all non-essential activities was introduced. For now, we have downgraded our expectations of 2020 onshore capacity additions in these countries by around 10%.
Subsequent downwards revisions may be made, should the lockdowns’ severity or duration intensify. Of the large European wind markets, Sweden, with its light-touch restrictions, is expected to suffer much less disruption and we have left our 2020 Swedish incremental capacity forecast unchanged at 1.3GW for onshore additions this year.
State-by state measures
Lockdowns of varying degrees are also in force in several countries in the Americas. In the US, their severity varies on a state-by-state basis. All 40 million people in California, for example, have been in lockdown since mid-March. In contrast, the restrictions in several other key wind states such as Texas, Iowa and Oklahoma, are less stringent. But some impact on the pace of wind farm installation is expected this year. For the US as a whole, we had previously expected to see almost 7GW of new capacity this year. Now, we are forecasting 2020 additions of around 6.5GW.
Brazil is not yet in a national-level lockdown, but restrictions are in place in several states. In addition, power auctions scheduled for this year have been postponed, and the wind sector is likely to be further affected by supply-chain disruption and interruptions to construction. As a result, we have downgraded our expectations of 2020 capacity additions in Brazil to just under 1.4GW of incremental capacity this year.
In Argentina, meanwhile, a national lockdown has led to wind-farm installation activity being suspended. We had expected to see around 700MW of onshore wind capacity materialising in Argentina this year, but construction delays now put some of that at risk.
Wait and see in Africa
Elsewhere, and for the time being at least, Africa is the continent least affected by the coronavirus. Only a handful of African countries have yet to introduce stringent lockdown measures. But South Africa, by far the continent’s biggest wind market, is one of them. As a result, work at South Africa’s under construction wind farms was suspended at the end of March. We foresee some delays to these projects being completed and commissioned and have trimmed our 2020 incremental capacity forecast for South Africa accordingly.
