Coronavirus pandemic expected to slow down wind industry in China
The outbreak of the novel coronavirus (COVID-19) pandemic has led to a slowdown of economic activities in China and the wind power industry will be no exception, says GlobalData, a leading data and analytics company.
China has the largest installed wind power capacity with its in excess of 230GW contributing to more than 35% of global Installations. China has also been making the largest wind capacity additions for several years now. However, as a result of the COVID-19 pandemic, the wind sector is expected to face serious consequences as the capacity for equipment manufacturing and provision of engineering, procurement and construction (EPC) services has tightened.
Somik Das, Senior Power Analyst at GlobalData, comments: “China’s annual installation was expected to be around 24GW in 2020 and the outbreak is likely to impact installations equivalent to a massive 2GW - bringing down the installation to 22GW in 2020. A similar impact is expected for the supply of raw materials and components to orders outside China.
The halt of production alongside supply and logistics issues are likely to create tremendous backlogs in orders in the first and second fiscal quarters of 2020. Major Chinese turbine original equipment manufacturers (OEMs) such as Goldwind, Envision, Mingyang and Shanghai Electric, along with foreign turbine OEMs such as Vestas, Siemens Gamesa and GE Renewable Energy, had all reported resumed production in the first week of February. However, facilities are not yet operating at their full capacity due to the quarantine and most office work is being done remotely by employees from their homes.
Das adds: “There has been a significant drop in the number of cases in Wuhan, Hubei, indicating that China is crawling its way out of the pandemic. However, with the prevailing situation still critical, it is not clear by when the situation will stabilize. Considering the prevailing conditions, China is expected to extend the onshore wind feed-in-tariff deadline, which otherwise was supposed to expire on December 31, 2020.
“If China can continue to restore normalcy, it would be expected, that the Chinese wind industry would witness higher installation in the second quarter of the fiscal year 2020, to capitalize on the delayed feed-in-tarrif (FIT) deadline. Manufacturing is also likely to increase to make up for the losses incurred during the first half of the year.”
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