Looking back on 2020 – Part 1: How the wind industry defied global pandemic

As in most areas of life, the Covid-19 pandemic cast a big shadow over the wind industry, yet the sector proved its resilience, as the first part of Windpower Monthly's round-up of the big themes of the year shows

The coronavirus pandemic triggered a drop in energy demand and lower prices (pic: Siemens)
The coronavirus pandemic triggered a drop in energy demand and lower prices (pic: Siemens)

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Every area of life was impacted by the coronavirus pandemic in 2020 — and the wind industry was no exception. National lockdowns disrupted supply chains and hindered project execution across the world, while the slowdown in commercial activity led to a drop in energy demand and pushed down power prices.

Analysts first warned of delays to wind-power installations in China — where the pandemic began — in February, while the Chinese Wind Energy Association claimed disruptions there would likely be “moderate and focused in certain geographic regions”.

But by March, the global wind-power industry was forced to react, with manufacturers temporarily shutting production facilities and then bringing in enhanced safety measures upon reopening. Developers were forced to halt construction work as the virus spread and more and more countries entered lockdown. All of these developments happened at different times in different regions depending on national rules, but the impact was unavoidable and resulted in job losses.

Trade events were cancelled, delayed or rearranged for a digital setting, while legislation and auction processes were postponed as government and industry dealt with the crisis.

By April, turbine giants such as Vestas and Siemens Gamesa scrapped financial guidance for the year due to a lack of visibility over how the health crisis might develop. The impact of the pandemic and its consequent problems started to show on companies’ bottom lines, with manufacturers reporting losses for the January-March quarter. Losses would continue to grow in the following three months, before restrictions and the subsequent financial pressure slowly began to ease towards the end of the year.

Larger developers, however, appeared more resistant to the challenges brought by the pandemic than manufacturers, but were certainly not exempt.

Turbine purchasing slumped in the first five months of the year ­— possibly as a result of the greater uncertainty as the pandemic started to spread — before recovering from June and into the second half of 2020.

But wind power has proved resilient, with annual installations expected not to be dented too much. Project installations generally seem to have been delayed rather than cancelled, and renewables’ increased production levels and priority access to grids prompted clean-energy sources to squeeze out fossil fuels — albeit amid reduced demand for electricity.

However, the immediate future is uncertain. Wind, and renewables more generally, have featured in some — but not all — governments’ stimulus or recovery packages. The International Energy Agency (IEA) projected an up to 8% drop in carbon emissions this year, but warned of a rebound in 2021 when economic activity is likely restored to something approaching normality. And it is unclear what this “new normal” will look like or precisely when — and even if — it will come.

Looking back on 2020 – Part 2: Losses mount as Covid adds to sector’s woes

Looking back on 2020 – Part 3: Turbine ratings and rotor sizes continue to go up

Looking back on 2020 – Part 4: As people stay home, oil and gas majors go green

Looking back on 2020 – Part 5: Politicians pledge green post-Covid recovery

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