With Europe in Covid-19 lockdown, speculation about the prospects of various industries is rife and solar is no exception. Trade body SolarPower Europe this morning brought together commentators from the Green Power division of Italian energy company Enel; British renewables developer Solarcentury; and Spanish and Italian industry organizations to discuss the unfolding crisis in a webinar.
Aristotelis Chantavas, head of Europe for Enel Green Power, and Susannah Wood, marketing director of Solarcentury, both argued the pandemic will delay projects, rather than leading to their cancellation.
Wood cited a project Solarcentury is installing in the Netherlands where she said it was possible to maintain social distancing rules on utility scale solar sites, given the size of the projects. Having a local labor force was crucial, it emerged, with Dutch personnel continuing at the Solarcentury project while staff from further afield working for a German company at the facility could not reach the site.
Supplies
A panel also featuring representatives of Spanish PV association Unef and Italian renewables body Elettricità Futura were unconcerned about supply shortages of inverters and other project components now production has resumed in China.
With workers and materials available, it is financing that was identified as a critical obstacle to project deployment. “Access to debt financing has become more complicated, which maybe tells more about the state of health of banks than the state of … health of the solar sector,” said Wood.
Unef general director José Donoso said: “Access to financial services will be worse in the time to come as banks will get more conservative.” The industry spokesman predicted Spain will see 2 GW of new solar generation capacity this year, as large scale projects continue even as the market for small installations has ground to a halt.
Alessio Cipullo, who is responsible for European affairs and studies at Elettricità Futura, spoke about the concern of potential curtailment of solar energy. Reduced economic activity in Italy has reportedly seen power demand fall 22% introducing the potential for renewable electricity to be wasted, although Cipullo said favorable weather in recent weeks had seen Italian renewables companies generate and sell high volumes of energy.
Energy price
In fact, Donoso said, it was fossil fuel plants which have been taking the curtailment hit in Spain in the last four weeks as average power prices have plunged to €32/MWh, well down on the figure seen this time last year.
Enel Green Power’s Chantavas said, “This crisis shows that it is important to have local production of everything, including energy and this is were renewables can step in.”
Perhaps unsurprisingly, the developer and membership body representatives repeated calls to simplify the permitting procedures for renewables projects, claiming red tape made banks even less willing to finance such assets. Donoso suggested further fiscal incentives, such as VAT cuts for self-consumption solar projects, could help keep the clean energy sector on an even keel.
Chantavas suggested the EU’s Green Deal for Europe could be used to reduce permitting requirements and address financing concerns.
Covid-19
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This headline is a little misleading. Interest rates are at their historically lowest ever. The cost of borrowing has never been cheaper. Covid-19, however, has exposed the vulnerability of governments and their central banks. Many developed countries have spent ‘fiat’ money for decades, building up their Mount Everest of debt. The virus crisis has triggered massive cash calls on central banks, through the issuing of new bonds. There are no reserves left to lend to projects!
Hi Jeffrey,
Thanks for your comment. If, as you say, ‘there are no reserves left to lend for projects’, surely the headline is entirely accurate.