Australia’s renewables industry has been hit “hard” by the Covid-19 pandemic, with an estimated 3,000 megawatts (MW) of wind and solar photovoltaic projects at risk.
According to analysts at Rystad Energy, the pandemic will emphasize the already sluggish trend in the industry, postponing or cancelling financial close of projects.
This is largely a result of the falling Australian dollar, which has plummeted 20% relative to the U.S. dollar since the beginning of January. The unfavorable currency exchange rate has increased the capex for both utility PV and wind projects, “making once viable projects no longer economical,” Rystad said.
The Norwegian research company forecast earlier that 2,000 to 3,000 MW of wind and solar capacity would be sanctioned and start construction this year, Kallanish Energy reports.
However, to date only 740 MW of capacity has been sanctioned. None of these projects that received financial close have started construction or “will do so in 2020,” the analysts said.
“The impact of Covid-19 on project economics will likely delay or cancel the financial close of the remaining projects,” they added.
New South Wales is the state said to be most impacted, as 65% of the Australian solar PV projects and 67% of the wind projects would be located there.
In terms of companies, Rystad said the most negatively impacted will be: UPC, Neoen, Wollar Solar, Canadian Solar, Tilt and Goldwind.
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