The pandemic likewise threatens to divert regulatory attention from ordinarily pressing energy matters to other more urgent issues.
TThe COVID-19 pandemic has disrupted just about every sector of the economy, and that now includes the energy sector, according to analysts and media reports.
Beyond just constricting demand, the virus had begun to undermine energy-related supply chains, and the solar, utility storage and electric vehicle industries may be particularly hard hit, according to experts.
The pandemic likewise threatens to divert regulatory attention from ordinarily pressing energy matters to other more urgent issues. Energy regulators in Texas and elsewhere, for instance, have ordered or encouraged utilities to suspend nonpayment disconnections because of the crisis.
Josiah Neeley, senior fellow of energy policy at the R Street Institute, told the Utility Dive news service that in light of the pandemic, former industry growth projections now have become worthless. “Everybody is going to be thinking quite differently now than they were a couple of months ago, both on the supply and on the demand side,” he said.
According to reports:
- Pointing to COVID-19, analysts at BloombergNEF last week reduced their 2020 forecast for global solar demand from its previous range of 121 to 152 gigawatts to a revised range of 108 to 143 GW. If ultimately on target, the growth decline would mark a first for the industry since at least the 1980s.
- The stock market collapse also will make it difficult for investors to raise equity. According to BNEF, plummeting consumer confidence has undermined both solar installations and purchase power agreements.
- Bob Nichols, partner with Bracewell LLP, told Utility Dive news that the pandemic has become “an immediate and dramatic business concern” for the industry as a whole. “In 32 years of this, I’ve never seen anything where the conventional wisdom of what needs to be done … seems to change everyday,” he said.
- The Solar Energy Industries Association announced in an open letter that its members have reported supply chain disruptions, delays to projects and sales challenges. All this combined could prevent solar manufacturers from meeting project delivery deadlines and even affect their eligibility for tax incentives, according to the letter.
- COVID-19 also could dramatically suppress demand for energy storage, according to BloombergNEF, with that segment of the industry already experiencing supply disruptions.