Renewable energy projects expecting to achieve financial close or break ground globally will not avoid taking a hit from COVID-19’s effect on the economy. A Rystad Energy analysis shows forecast growth in newly commissioned solar and wind projects will now be wiped out for 2020 and cut by a further 10 percent in 2021 as the U.S. dollar surges and currencies fall across the globe.
Rystad Energy expects these movements in the foreign exchange market to cause companies to pause contracting key components, which are typically procured in U.S. dollars. Renewable projects in Australia, Brazil, Mexico and South Africa will be especially affected, as projects in the procurement phase could face capital cost increases of up to 36 percent due to the rapid depreciation of local currencies in these countries.
Before the novel coronavirus pandemic, Rystad Energy expected 140 gigawatts of global solar photovoltaic additions and 75 gigawatts of wind capacity additions in 2020, a ye