Europe warned about virus impact on clean energy tech
17 March 2020 | Adaptation
Governments across Europe should keep clean energy top of mind as they consider measures to protect their economies against a likely recession caused by the coronavirus, the International Energy Agency (IEA) has said.
The European Commission is paying close attention to the economic impact of the coronavirus, saying border shutdowns risk disrupting entire product value chains – ranging from automotive to agriculture and food. And this is valid also for wind, solar and energy-saving technologies
“On renewables, this is definitely one dimension in a very complex situation that we are facing at the moment,” EU Commission spokesperson Eric Mamer told a regular press briefing on Monday (16 March)
But he said it was too early to make recommendations to EU member states at this stage about potential measures to prop up investments in clean technologies.
“We will have to see as events unfold what analysis we can make of the impact on investments in various areas and how we can react,” Mamer said.
Renewables and energy savings are cornerstones of the EU’s climate change strategy and a central element of the bloc’s Green Deal agenda of reaching climate neutrality by 2050.
Over the weekend, the International Energy Agency (IEA) has warned that low oil prices risked delaying investments into clean tech such as wind and solar, in the face of falling oil prices.
“The sharp decline in the oil market may well undermine clean energy transitions by reducing the impetus for energy efficiency policies,” the IEA’s executive director Fatih Birol said in a blog post published over the weekend (14 March).
As governments draw up stimulus plans to counter the economic damage from the coronavirus, they should ensure that clean energy investment “doesn’t get lost amid the flurry of immediate priorities,” Birol said.
“Governments can use the current situation to step up their climate ambitions and launch sustainable stimulus packages focused on clean energy technologies,” he argued, saying solar, wind, hydrogen, batteries and carbon capture (CCUS) “should be a central part of governments’ plans because it will bring the twin benefits of stimulating economies and accelerating clean energy transitions”.
The IEA’s warning isn’t isolated. On Thursday (12 March), BloombergNEF published a report on the likely effects of COVID-19 on renewable power, energy storage, electric vehicles, heating, cooling and the circular economy.
“We are currently more concerned about demand, as policymakers may divert attention away from clean energy to more pressing concerns,” said BloombergNEF in the introduction to the study.
2020 could be the first down year for solar since 1980s
The solar PV sector is expected to be hardest hit by the economic slowdown caused by the coronavirus, as solar PV modules are chiefly manufactured in China, which has temporarily shut down factories to contain the spread of the infection.
BNEF cut its global solar demand forecast for 2020 by 8% – from 121-152GW to 108-143GW, saying “this could make 2020 the first down year for solar capacity addition since at least the 1980s”.
There was also a potential silver lining to the crisis, BloombergNEF pointed out, saying the short-term interruption of production in China has highlighted the need for diversified supply chains and strengthened the case for localised manufacturing in places like Europe and the US.
However, it said this would be the case “especially for batteries”, not for solar PV.