How Is Renewable Energy Coping with COVID?
For 20 years the renewable energy sector has seen a steady rise. In fact, new renewable energy source (RES) installations were expected to reach record levels in 2020.
Then along came Covid-19.
According to a report developed by the Renewable Energy Solutions for Africa Foundation (RES4Africa) and the United Nations Economic Commission for Africa (UNECA), which was released in June 2020, the power sector was “considerably struck by the disruption of global supply chains and the delay of renewable energy projects”.
Nigel Engelbrecht, the managing director of Backbone Energy, could see the effects of this clearly. He said, “The lockdowns impacted solar panel supply considerably. With restrictions put on imports, backlogs of panel orders ran into three months on projects.”
Costs soared too. Engelbrecht added, “The rate of exchange (ROE) caused large price increases in all solar product supplies, forcing importers to buy at those price points.”
While the RES4Africa report was positive in stating that RES investments are expected to recover in 2021, it also expressed concern that the Covid-19 crisis is going to worsen the existing challenges that renewable energy faces, as “investors lack short-term liquidity and need to re-prioritise spending”.
As mentioned in the report, the pandemic has “triggered demand and supply side shocks to African economies”, including “labour supply…particularly in manufacturing and service sectors”.
The lockdowns, closing of borders, loss of loved ones, and loss of income have left many reeling. The International Labour Organization (ILO) has apparently forecast that Africa will face 19 million job losses.
These factors had an impact on the demand for electricity and the demand for renewable energy projects. By June 2020 demand had reduced by an average of 6 000 MW and up to a maximum of 11 000 MW. According to Eskom maintenance doubled to over 9 000 MW, with the delay at the same time of some reliability outages.
Engelbrecht showed that the initial shock is still being felt into 2021. He said, “There is still a backlog on components manufactured here, especially on locally assembled batteries like lithiums.
“Residential installations are back on track but levels four and five of lockdown caused major delays and cancellation of projects.”
The RES4Africa report continues, on a positive note, that renewable energy sources were the only type of energy source that saw an increase in demand at the beginning of 2020. Renewable power sources proved to be the most resilient despite the changes and disruptions.
The report even concludes that, “thanks to their decreasing costs” and resilience (as demonstrated during the pandemic), renewable energies are helping countries in Africa develop modern, sustainable and secure energy systems.
Engelbrecht echoed that positive sentiment.
“December was a great turnaround in the cost of solar product supplies, with the ROE coming down and stabilising. Also, more people work from home now and have decided to invest in either small micro systems or full residential systems,” he said.
So, the pandemic has had a severe impact in this sector, as it has had in all aspects of our lives, but the news for the future seems positive. It looks like we will be able to stay charged.
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