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The pandemic will postpone or cancel financial close of some 3 gigawatts of projects in Australia according to Rystad Energy which blames the falling Australian dollar, down 20% against the greenback since January.
This has pushed up capital expenditure up for both solar PV and wind projects, making otherwise viable projects suddenly uneconomic.
Hardware makes up 60% of capex and is usually priced in foreign currency. Suddenly developers are finding it more difficult to meet power purchase agreements profitably while cash is increasingly scarce and, in this environment, financiers won't lend cheaply.
So far this year only 400 megawatts has broken ground down from Rystad predictions of between 2-3GW of projects beginning this year.
"New South Wales will be the biggest loser, as 65% of solar PV and 67% of wind projects which are expected to, but have not yet reached financial close in 2020 are located in the state," it said.
Solar companies hardest hit will be UPC, Neoen, Wollar Solar and Canadian Solar while wind companies impacted will likely be Tilt and Goldwind.
Things were not ideal through 2019 as grid challenges finally came to the fore and "these issues slowed the number of projects and associated capacity to break ground at the end of 2019," Rystad said.
Globally Wood Mackenzie estimates solar and storage will contract by 20% compared to its base case for 2020 while in the shorter term the impact on onshore wind will be "muted in the near term" however cascading supply chain and construction risk present further downside risk.
Overall COVID-19 will result in a 4.9GW decline in wind additions compared to the consultancy's previous outlook.
"We highlight India as presenting additional downside risk. Further risks exist in Asia, as travel restrictions and mitigation efforts impact Japan, Australia, Vietnam and others," it said.
There is little impact to offshore win, thanks to China's recovery and a nascent industry in the US.
It has revised down its outlook for solar installations by 18% from pre-coronavirus levels from 129.5 GW to 106.4 GW.
"In the absence of prolonged recession or profound changes to financing and utility procurement, 2021 will recover to be 3% below pre-coronavirus expected levels," it said.
Storage installations could fall 20% compared to its 2020 base case, with the risk stemming largely from project execution delays.
Yesterday in its April Oil Outlook report the IEA said global capital expenditure by oil and gas companies in 2020 is forecast to drop by about 32% versus 2019 to $335 billion.
"This reduction of financial resources also undermines the ability of the oil industry to develop some of the technologies needed for clean energy transitions around the world," it said.
This reiterates previous suggestions that most oilers looking at large scale renewable investments had modelled spend based on a US$60 per barrel oil price.
However the oil and gas industry development in renewables only represents 1% of global expenditure at this point, and much of that is from major international oil companies and not national oil companies.