COVID-19 Could Jump-Start Renewable Energy Projects
More and more every day, I’m reminded of this Warren Buffett quote: “You know, people talk about this being an uncertain time.”
It certainly describes the environment that COVID-19 has created: fear of the unknown. It’s hard to know when this will all blow over and things will return to normal.
Here’s what we do know. The bulk of the people who are infected with COVID-19 will recover, just as if they had the flu.
And for some more good news, the pandemic could give renewable energy projects a big boost on several fronts.
On Lockdown
As COVID-19 spreads around the world, the initial response of many countries has been to lock down everything.
Stores, schools, government buildings, churches and entire companies are shutting down or reducing hours. Almost every sport has canceled or delayed remaining events.
This initial draconian reaction, while warranted, is creating serious, short-term implications for the world’s economy.
The biggest threat comes from China. It plays a big part in thousands of global supply chains. And while China is well on its way to recovering from COVID-19, its factories are just now restarting.
It’s clear that the effects caused by COVID-19 are severe. They are also likely to be only temporary.
But the threats posed by rapidly occurring climate change aren’t going anywhere. Governments around the world have a real opportunity here.
They are responding to the COVID-19 outbreak with plenty of money. But we want to come out of this and return to a strong economy.
And there’s a crucial area that some of the global funds should be funneled to: renewable energy.
This could bring twin benefits. World economies could be jump-started and the move to clean energy could continue to accelerate.
Right now, congressional leaders are showing a rare bit of bipartisan cooperation. It would be interesting to see how far that could extend.
Keep It Moving
Vestas Wind Systems A/S (OTC: VWDRY) is a Danish manufacturer of wind turbines. Like many companies, it depends on China for components of its supply chain.
It’s planning to restart its operations next week. However, there’s no question that COVID-19 effects are slowing down the global wind industry.
Keeping the wind industry supply chain moving forward is crucial. Significant slowdowns could reduce 2020’s installed capacity.
But what about solar? The pandemic is starting to disrupt supply chains there as well.
Bloomberg New Energy Finance cut its worldwide solar forecast for this year. It had previously forecast 121 to 152 gigawatts (GW).
But last Friday, it cut those numbers down to 108 to 143 GW. If its forecast holds true, 2020 will be the first year since the 1980s to show a decline in solar additions, according to Bloomberg.
The Solar Energy Industries Association – an advocacy organization for the U.S. solar industry – is already making the case for including the solar industry in any legislation geared toward economic recovery from COVID-19.
Chinese solar panel factories are also starting to reboot, helping to keep supply chain disruptions to a minimum.
In the End…
As I sit here and think about the long-term implications of COVID-19, one thing becomes crystal clear…
We need to continue to promote supply chain diversification.
Putting all of our eggs in China’s basket has blown up in our face. We need manufacturing lines in the U.S. focused on the renewable energy industry.
I’m not trying to be a protectionist. I think everyone in the world benefits from a thriving, global economy.
We need to take care of ourselves and get beyond COVID-19 worries. But we also need to take care of our planet.
If we don’t, it might be even more difficult to fight off the next pandemic.