India is likely to see over 3GW of solar and wind projects delayed due to the country’s coronavirus lockdown, according to analyst Wood Mackenzie.
The analyst has downgraded the year’s solar PV outlook by 24.8% as the industry is dependent on importing modules from China. In total it expects to see solar PV build out reduced by 2.9GW to 8.9GW.
The analyst also says supply and labour disruptions from the current lockdown could delay 400 megawatts (MW) of this year’s scheduled 3GW wind build into 2021, equating to a downgrade of 11% for 2020.
Overall Wood Mackenzie sees a 21.6% downgrade to this year’s build out.
Wood Mackenzie principal analyst Robert Liew said: “The timing of the lockdown is unfortunate as Q1 is typically one of the busiest periods for wind project installations.
“The lockdown will delay some projects until summer, and if the lockdown is extended past April, wind farm construction could be further delayed into the monsoon season, where wind installations are typically at their lowest.”
Similar to the wind sector, India’s solar PV installations are expected to be hit hard as the industry is heavily dependent on Chinese PV module imports – amounting to 80% of total volume – which have been disrupted due to the coronavirus.
Senior analyst Rishab Shrestha said: “Current supply and labour disruptions will have an outsized negative impact on 2020 installations. Q1 is expected to be strongly impacted with a potential 60% year-on-year quarterly downgrade, or 1.2 GW, down from about 3 GW in Q1 2019.
“We remain cautious on the outlook for the second half of the year as supply and logistics bottlenecks linger. Consequently, our full year downgrade stands at 2.9 GW, a 24.8% reduction resulting in a revised 2020 outlook of 8.9 GW of solar PV installations.”
Wood Mackenzies says the Indian states with the highest coronavirus infection rates also correspond with the areas that are favourable to wind and solar development.
The state of Gujarat delivered 58% or 1.4 GW of new added wind capacity in India in 2019, and unfortunately, stands as one of the top ten worst hit states in terms of coronavirus infections according to the analyst.
On the solar front, the states of Karnataka (2 GW), Tamil Nadu (1.6 GW) and Rajasthan (1.7 GW) were the top three states accounting for 55% of solar PV installations in 2019, and are all in the top ten worst hit states.
Liew and Shrestha added that if the virus situation continues to escalate and the lockdown is extended, there will be severe financial impact on utility companies. This will have an impact on solar PV and wind installation developers’ cash flows.