BloombergNEF has issued a research note highlighting some of the likely effects of the coronavirus COVID-19 outbreak over the next year on the transition to a clean economy: including renewable power, energy storage, electric vehicles, heating, cooling and the circular economy.
The global auto market is very sensitive to macroeconomic conditions and will be hit hard by the coronavirus and any economic contraction that accompanies it, BNEF says. Early data from the main markets in Asia shows a drop in vehicle sales of 44% for China and 18% for Korea, two of the hardest hit countries.
Other elements of the note:
BNEF cut the global solar demand forecast for 2020 from 121-152GW to 108-143GW. This could make 2020 the first down year for solar capacity addition since at least the 1980s.
Chinese factories are restarting, so the pressure on supply of key components and equipment is likely to ease. Although there are short-term bottlenecks to delivery, BNEF is currently more concerned about demand, as policy makers may divert attention away from clean energy to more pressing concerns. However, the short-term interruption to production in China has highlighted the need for diversified supply chains and strengthened the case for localized manufacturing in Asia, Europe and the US, especially for batteries.
The exception is wind, where delivery and build schedules are tight and specialized equipment is rented for a limited time, BNEF says. BNEF sees some downside risk to its global wind forecast of 75.4GW, but thus far still expects 2020 to be a record year for wind build.
Battery demand in an optimistic scenario will be 3GWh lower in 2020 than initially forecast, and 9GWh lower in a pessimistic scenario.