The COVID-19 outbreak has put a toll on the renewables industry as it did to the many other industries across the globe. Potentially, the pandemic will shift the availability of financing, developers’ investment decisions, and the priority of government policies not only for 2020 but even until 2025. This will likely create an uncertainty in the market that has rapidly expanded in the recent five years.
Fortunately, a handful of countries are introducing massive programs to respond to the meltdown of the economy brought about by the outbreak. Several of these measures can also be implemented to the renewables sector.
Decline in Costs of Wind and Solar
The massive reductions in costs in the past decade has been the top reasons why renewables are rapidly mixing into the global electricity supply. The electricity cost from onshore solar and wind PV is becoming increasingly cheaper compared to new and pre-existing fossil fuel plants.
In most countries nowadays, renewables are starting to take the frontlines and becoming the cheapest way of meeting the growing demand for electricity. An additional positive point is that while there may be temporary disruptions in supply that can cause local price fluctuations, the pandemic is unlikely to change the pre-existing downward trend on renewables cost.
Government’s Role in Renewable Energy Deployment
The government will likely remain instrumental in the deployment of renewable energy in the post-pandemic world. To tackle the challenges brought about by COVID-19, initial government policies focus more on postponing planned auctions and extending project-commissioning deadlines.
For instance, Greece, France, Germany, and the UK have already offered some flexibility for developers who will not be able to meet the target policy-related final commissioning dates. These measures will protect deployment this year and the next, but the delay of auctions will continue to affect the years beyond 2021, especially in countries where postponement is indefinite.
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