Renewables has so far been the energy source most resilient to Covid‑19 lockdown measures. In Q1 2020, global use of renewable energy in all sectors increased by about 1.5% relative to Q1 2019, according to the International Energy Agency. The increase was driven by a rise of about 3% in renewable electricity generation after more than 100 GW of solar PV and about 60 GW of wind power projects were completed in 2019. In addition, wind availability was high in Europe and the United States in Q1 2020.

In addition, the availability of wind energy was highest in Europe and the United States in the first quarter of 2020. Renewables are also more resilient to lower electricity demand due to their low operating costs.

The share of renewables in global electricity generation jumped to nearly 28% in Q1 2020 from 26% in Q1 2019. The increase in renewables came mainly at the cost of coal and gas, though those two sources still represent close to 60% of global electricity supply.

On an hourly basis, renewables met a higher share of electricity demand throughout most of Q1 2020. Before lockdown measures were implemented, shares renewables were similar or higher due to favourable weather conditions, projects completed in 2019 and limited electricity demand growth. Once lockdown measures were put in place, electricity demand fell while levels of wind and solar PV held steady.

This led to a noticeable step up in renewables’ share of demand. Multiple regions have seen record-high hourly shares in electricity demand during lockdowns, including Belgium, Italy, Germany, Hungary, and some parts of the United States.

Source: IEA

The renewable industry

The renewables industry is facing supply chain disruptions and a slowdown in installation activity due to lockdown measures. Having paused or reduced production because of lockdowns in several key provinces, China – which accounts for over 70% of global solar PV module manufacturing – is ramping up production again.

Wind technology, on the other hand, is much more globally interconnected. Some production facilities in Europe, India and in various US states were closed or reduced activity in March.

These disruptions, especially in February and March, have sent ripples across manufacturing hubs as wind turbines require multiple parts are shipped from across the globe.

Liquid biofuels are directly affected by declining road transport fuel demand as they are blended with gasoline or diesel.

Ethanol and biodiesel production facilities in Brazil, the European Union and the United States have reduced their outputs as a result of sluggish local and international demand.

US ethanol production was down by nearly 50% between the end of February and early April, as numerous plants idled or reduced output.

Brazil’s ethanol sector is under dual pressure from constrained demand and low gasoline prices.

Ethanol plants in many countries have ventured into production of much-needed hand sanitizer.

Estimates for 2020 (or the remainder of 2020)

 The IEA estimates that by 2020, renewable electricity generation will grow by almost 5% despite delays in the construction of new projects caused by the Covid-19 crisis. Thus, renewables will account for almost 30% of the world’s electricity supply, halving the gap with coal (from 10 percentage points in 2019).

The output of hydropower remains the largest uncertainty in 2020, as it accounts for almost 60% of all renewable generation globally and is dependent on rainfall and temperature patterns (rain and temperature).

Solar photovoltaic is under an uncertainty over capacity growth in 2020, especially for distributed solar PV applications.

Last year, one-fifth of all renewable capacity deployed globally consisted of individuals and small-to-medium-sized enterprises installing solar PV panels on their roofs or business sites. Currently, the installation of distributed solar PV has stopped or dramatically slowed in many countries as lockdown measures prevent access to the buildings.

 As for wind energy, it may be the one that increases the most in terms of absolute generation among all the renewables.

Some important policy deadlines require developers to commission projects by the end of 2020. In China, all wind projects need to be commissioned by the end of 2020 to qualify for feed-in tariff subsidies.

In the United States, wind developers are in a similar situation, as they are required to ensure projects are operational by the end of 2020 to receive production tax credits.

Electricity generation for bioenergy is expected to slow down as supply chain interruptions and logistical challenges are expected for the delivery. For instance, large bioenergy power plants in Europe use as fuel wood pellets that mostly come from North America.

Source: IEA

The production of renewable electricity largely depends on the availability of natural resources, as weather is the main determinant for hydropower, wind and solar PV, which together account for about 90% of all renewable electricity generation.

The estimates for 2020 are based on past weather trends, and so deviations from these historical averages are a source of significant uncertainty.

Such uncertainty also surrounds public health, the economy and therefore energy for the rest of 2020 which is unprecedented. This analysis therefore not only charts a possible path for energy use and CO2 emissions in 2020 but also highlights the many factors that could lead to differing outcomes. We drew key lessons on how to navigate this crisis at once.

Priscila Scheel| Energy Consultant


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