Coronavirus Outbreak: India's renewables installation could fall by a fifth due to lockdown, says report

India could face over 21.6 percent of 3 gigawatts (GW) of solar power and wind energy projects being delayed due to the nationwide lockdown imposed to check the spread of coronavirus, Wood Mackenzie said in a report

Press Trust of India April 07, 2020 16:14:33 IST
Coronavirus Outbreak: India's renewables installation could fall by a fifth due to lockdown, says report

New Delhi: India could face over 21.6 percent of 3 gigawatts (GW) of solar power and wind energy projects being delayed due to the nationwide lockdown imposed to check the spread of coronavirus , Wood Mackenzie said in a report.

While wind projects would be hit by supply and labour disruptions in the peak season, solar photovoltaic (PV) installations are expected to be hit hard as the industry is heavily dependent on Chinese PV module imports, which have been disrupted due to coronavirus .

"Wood Mackenzie projects that India could face over 21.6 percent or 3 gigawatts (GW) of solar photovoltaic (PV) and wind installations being delayed as a result of the country's lockdown," it said in the report.

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Representational image. Reuters

Wood Mackenzie principal analyst Robert Liew said: "The timing of the lockdown is unfortunate as Q1 is typically one of the busiest periods for wind project installations.

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The lockdown will delay some projects until summer, and if the lockdown is extended past April, wind farm construction could be further delayed into the monsoon season, where wind installations are typically at their lowest".

With over 3 GW of wind projects under construction scheduled for 2020 completion, supply and labour disruptions from the current lockdown could delay 400 megawatts (MW) into 2021, equating to a downgrade of 11 percent for 2020.

Similar to the wind sector, India's solar PV installations is expected to be hit hard as the industry is heavily dependent on Chinese PV module imports (80 percent of total volume) which has been disrupted due to the coronavirus .

"Current supply and labour disruptions will have an outsized negative impact on 2020 installations. Q1 is expected to be strongly impacted with a potential 60 percent year-on-year quarterly downgrade, or 1.2 GW, down from about 3 GW in Q1 2019.

"We remain cautious on the outlook for the second half of the year as supply and logistics bottlenecks linger. Consequently, our full-year downgrade stands at 2.9 GW, a 24.8 percent reduction resulting in a revised 2020 outlook of 8.9 GW of solar PV installations," Senior analyst Rishab Shrestha said.

States with the highest coronavirus infection rates also correspond with the areas that are favourable to the wind and solar development.

Gujarat delivered 58 percent or 1.4 GW of newly added wind capacity in India in 2019 and is one of the top ten worst-hit states in terms of coronavirus infections.

On the solar front, Karnataka (2.0 GW), Tamil Nadu (1.6 GW) and Rajasthan (1.7 GW) were the top three states accounting for 55 percent of solar PV installations in 2019.

All of which are in the top ten worst-hit states.

Both analysts agree that current support measures by the government to mitigate the downturn are warranted, but if the virus situation continues to escalate and the lockdown is extended, there will be a severe financial impact on utility companies.

Consequently, solar PV and wind installation developers' cash flows will also be affected, and corporate bank loans for new project development could slow to a trickle, the report added.

Updated Date:

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