COVID 19 and its Impact on the Global Renewable Energy Sector
In its October 2019 report, the IEA stated that “Renewable power capacity is set to expand by 50% between 2019 and 2024”. With growing awareness of the climate emergency and the need to lessen our dependence on fossil fuels, all eyes were on the sector.
And then the pandemic hit, turning life as we know it on its head. There is no doubt that the impact of COVID-19 and resulting lockdowns on all businesses and sectors has been transformative. As we find ourselves over six months on since the pandemic began, we look at what the lasting impact could be on the global renewable sector.
Deloitte’s 2020 Renewable Energy Midyear Outlook, focussed on the US, noted the initial impact of the pandemic with wind and solar sectors in the US experiencing almost 100,000 job losses since March and the EIA revising its forecasts for wind and solar installation down by 5 and 10% respectively.
However, the report highlighted that the situation was changing rapidly with forecasts being revised on an upward trend later in the year, emphasising uncertainty around growth. Deloitte also emphasised that renewables’ ‘near-zero marginal costs’, the need for increased grid resilience across the US, are likely to be positive for the industry and ensure long-term growth.
EY’s Renewable Energy Country Attractiveness Index (RECAI) ranks the top 40 countries in the world on the attractiveness of their renewable energy investment and deployment opportunities. Its latest report shows America taking the top spot from China in 2020, with the UK moving from 8th to 6th place. The report suggests that the pandemic will have a short to medium term impact, but the long-term prospects for the industry remaining strong, signposting it as safe for investment.
EY also recognise that renewables will have a significant role to play in post-pandemic economic recovery, with investors and large companies remaining aware of the challenge of climate change, the need for ‘greater economic and social resilience’, and organisations keen to be identified as ‘responsible corporate citizens’ all working in the industry’s favour.
However, the IEA does bring a note of caution in its report on the COVID-19 crisis and clean energy progress, stating that although many renewable energy technologies have remained resilient to the effects of the pandemic, the impact on the structural progress required to achieve the goals set out for renewable energy and the climate has been significant and that urgent action is required from leadership across government and commerce to get us back on track.
So whilst it is clear that the renewables sector as a whole has largely weathered the initial shock of the pandemic, there is still much to be done to ensure global renewable energy targets are met in order to have the level impact on the climate that is required.