The novel coronavirus (Covid-19) outbreak has led to a slowdown of economic activities in China, including in the wind industry.
The International Monetary Fund (IMF) has cut its growth outlook for China by 0.4%-5.6% but also warned it could further revise its figures, considering the duration and the magnitude of coronavirus impact. The Covid-19 pandemic is expected to affect the country’s power demand and generation. Renewable energy additions are likely to be lower as a result of the suspension of manufacturing and construction activities in the first quarter of 2020. China has the largest installed wind power capacity, registering more than 230 gigawatts (GW) and contributing more than 35% of the global installations.
The wind sector is expected to face serious consequences, given the small capacity for wind equipment manufacturing, as well as engineering, procurement and construction (EPC). China’s annual installation was expected to be around 24GW in 2020 and the outbreak is likely to impact installations equivalent to 2GW in 2020. The supply of raw materials and components to countries outside of China is expected to be similarly impacted. Production stoppage and supply and logistics issues are likely to create order backlogs in the first and second quarter delivery schedules.
According to China’s National Energy Administration (NEA) industry survey on the impact of Covid-19, the major Chinese turbine original equipment manufacturers (OEMs), such as Goldwind, Envision, Mingyang, Shanghai Electric, three foreign turbine OEMs Vestas, Siemens Gamesa and GE Renewable Energy and major component manufacturers, including NGC, Winergy, ZF Wind Power, Yongji and Vertiv had all reportedly resumed their production in the week beginning 10 February. However, facilities are not yet operating at their full capacity due to the quarantine and most of the office work is done remotely from employees’ homes.
The coronavirus outbreak will impact the overall supply chain and installations not only in China but globally, mainly the US and other countries heavily dependent on Chinese raw material and components.