Over a fifth of India’s wind and solar PV installations – 21.6% combined – could be delayed this year as a result of country’s lockdown due to the coronavirus outbreak, according to analyst group Wood Mackenzie.
Out of the more than 3GW of wind projects under construction scheduled for 2020 completion, 400MW could be delayed into 2021, representing an 11% downgrade for this year.
India’s solar additions are also expected to be hit hard as the industry is heavily dependent on Chinese PV module imports – amounting to 80% of total volume – the supply chain for which has been disrupted due to Covid-19.
“The timing of the lockdown is unfortunate as Q1 is typically one of the busiest periods for wind project installations,” WoodMac principal analyst Robert Liew said.
“The lockdown will delay some projects until summer, and if [it] is extended past April, wind farm construction could be further delayed into the monsoon season, where installations are typically at their lowest.”
“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 1.2GW, down from about 3GW in Q1 2019,” senior analyst Rishab Shrestha said.
“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 2.9GW, a 24.8% reduction resulting in a revised 2020 outlook of 8.9GW of solar PV installations.”
To make matters worse, the Indian states with the highest coronavirus infection rates also correspond with the areas that are favourable to wind and solar development, WoodMac said.
In wind power, the state of Gujarat delivered 58%, or 1.4GW, of new added wind capacity in India in 2019. Gujarat now is among the ten worst hit states in terms of Covid-19 infections.
On the solar front, the states of Karnataka (2.0GW), Tamil Nadu (1.6GW) and Rajasthan (1.7GW) were the top three states accounting for 55% of solar PV installations in 2019. All of which are in the top ten worst hit states.
If the virus situation continues to escalate and the lockdown is extended, there will be severe financial impact on utility companies, the analysts warn.