Covid-19 outbreak will have a high impact on power project delays: Poll

GlobalData Energy 24 April 2020 (Last Updated April 24th, 2020 16:12)

Covid-19 outbreak will have a high impact on power project delays: Poll

The Covid-19 coronavirus was first identified in China’s Hubei province in December 2019 and has since become a global health threat, impacting 150 countries and triggering the World Health Organisation (WHO) to declare it a global pandemic. The power sector is one among the sectors affected due to the nationwide shutdown announced in Covid-19- affected countries. The nationwide shutdown has caused power project delays due to supply chain disruptions, unavailability of manpower and issues in obtaining project financings.

Recently, a poll was completed regarding the impact of Covid-19 on project delays by readers of between 26 March 2020 and 8 April 2020. As per the poll, 43% of the respondents believe that there will be a high impact of Covid-19 on project delays. Another 35% believe that there will be a moderate impact.

Just 23% of the respondents expect Covid-19 to have either low impact or no impact on the project schedule due to Covid-19 outbreak.

The analysis was based on 391 responses received during the period mentioned above.

COVID-19 impact on power project delays: What leading analytics firm GlobalData says

Power projects globally are facing major issues with the supply chain in obtaining the required engineering and technical support required for project construction and implementation. Unavailability of raw materials, components and technical support has led to a high impact on the project development resulting in delays extending from six months to two years.

In the Asia-Pacific region, project delays are expected to impact two of the largest markets, China and India. Projects in other parts of the world will also be delayed, with lack of engineering and technical support and supply chain disruptions being the major factor impacting project schedule and implementations.

Thermal projects are expected to contribute the maximum to the total capacity getting delayed. Coal projects under construction and planned are expected to face challenges in obtaining project approvals due to growing concerns of carbon emissions and climate change. Projects are facing financing issues with banks and financial institutions which are poignant towards financing clean technology. Nuclear projects also facing the brunt due to unavailability of manpower and engineering firms to implement project engineering, design and construction. Solar projects are witnessing delays due to supply chain disruption from China, the major supplier of solar PV components. The Covid-19 outbreak has resulted in major renewable components and equipment manufacturers halting production at their production sites.

GlobalData infers that the major concerns of the renewable energy sector revolve around global supply chains issues, with solar and wind projects already witnessing logistical delays. Covid-19 is further expected to delay renewable auctions and future installations globally. The most significant near-term impacts on renewable plants that are already contracted or under construction may be felt through supply chains.