Covid-19 severely hit the renewable energy industry in Australia, causing 2GW of photovoltaic projects to be delayed or cancelled.
The main reason for the delay and cancellation was the fall of the Australian dollar. Affected by the epidemic, the Australian dollar has fallen by 20% since the beginning of January. This has led to an increase in capital expenditures for large-scale photovoltaic and wind energy projects, making previously feasible projects no longer economical.
Among these states in Australia, New South Wales is the most affected area. Because 65% of solar photovoltaic power generation and 67% of wind power projects are distributed in this state. These projects should have been completed in 2020, but financial settlement has not yet been completed.
In 2019, renewable energy faces major challenges in grid integration. Including network capacity availability, debugging problems, marginal loss factor (MLF) and system strength variability. These issues, coupled with the economics of already challenging projects, delayed the groundbreaking of some projects at the end of 2019.
The weak trend of project development continues until 2020. The groundbreaking project in the first quarter was less than 400 MW. Since the outbreak in the first quarter, the pace of construction has slowed even further.
Since most of the wind power photovoltaic project's expenditure is for equipment purchases, and equipment purchases are mostly denominated in foreign currencies, the collapse of the Australian dollar has had a significant impact on the project. Cash is a scarce commodity today, and financing becomes a problem in the short term.
As equipment costs rise and capital expenditures increase, project development becomes more challenging.
The impact of Covid-19 on the project economy may result in the delay or cancellation of the financial settlement of the remaining projects. In early 2020, it is expected that 2 to 3 GW of renewable energy projects will complete financial settlement and start construction this year. This includes 1.1 GW of wind energy and 1 to 2 GW of photovoltaic projects. Currently, 530 MWac of photovoltaic power generation capacity and 210 MWac of wind power generation have completed project settlement, or construction will begin in 2020.
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