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Wind farm projects at risk

The global wind power boom is facing a sharp slowdown as coronavirus restrictions hit supply chains, threatening projects with delay or even cancellation. Worldwide disruption from measures to slow the pandemic has led to component shortages at companies including Vestas and Siemens Gamesa, putting as much as 30 gigawatts of new capacity at risk in the US, China and Europe this year alone, industry bodies say.

The wind energy industry had been expecting a bumper 2020 as developers raced to complete projects before a year-end lapse of subsidies in China and the US, with 76.7GW of new projects due to come online — a 24 per cent increase from the previous year, according to energy consultancy Wood Mackenzie. But the supply chain bottlenecks have left 16GW of new wind power capacity in the US, 4.6GW in Europe and 10GW in China at risk of delay this year, according to the American Wind Energy Association, Wind Europe and the Global Wind Energy Council.

Independent consultancies have already downgraded their 2020 forecasts for new capacity this year by up to 9GW. The supply chain delays have created a shortage of turbine blades, gearbox bearings and logistical equipment such as cranes, analysts say, exacerbating problems in a network that was already stretched to meet breakneck growth in demand.

Shashi Barla of Wood Mackenzie said there had been a global “ripple effect” from factory shutdowns in China, which accounts for 40–50 per cent of the global wind power supply chain and was the first country to be hit by the coronavirus. “The virus and restrictions spread to other key wind power manufacturing hubs such as Spain, India and the US, jeopardising $6bn worth of turbines and components production for the year. It’s impacting demand in all markets.”

Vestas, which suspended its annual guidance due to the uncertain outlook, said: “We have invoked force majeures based on the impact of Covid-19 to our operations.” Siemens Gamesa said it was assessing the impact of the virus on its supply chain. “Today we are experiencing some big delays. You have some force majeure notifications — it will take more time,” said Gwenaëlle Avice-Huet, chief executive of Engie North America. However, she added that the company had not adjusted its 2GW target for installations this year.

Chinese suppliers are now running above normal capacity in some cases to catch up, said Feng Zhao, strategy director at GWEC. However, China’s turbine manufacturers are increasingly concerned by a shortage of balsa, used in blades, with leading supplier Ecuador on lockdown. Project developers, meanwhile, expressed growing concerns that extra capital costs to complete existing projects and limited access to financing could restrict future investment in wind farms.

Source: Financial Times, 29-04-2020 (