COVID-19 Halts up to 3 GW of Wind, Solar Projects in Australia

The global COVID-19 pandemic has hit the renewables industry hard in Australia, postponing or cancelling the financial close of up to 3 GW of projects

The global COVID-19 pandemic has hit the renewables industry hard in Australia, postponing or cancelling the financial close of up to 3 gigawatts (GW) of projects according to a new assessment from Norwegian consultancy Rystad Energy.

The delays and cancellations are largely the results of the falling Australian dollar, which has plummeted 20 percent relative to the US dollar since the beginning of January. This has resulted in capex increases for both utility PV and wind projects, making once viable projects no longer economical. AS per the report, New South Wales will be the biggest loser, as 65 percent of solar PV and 67 percent of wind projects which are expected to, but have not yet reached financial close in 2020 are located in the state. Utility PV companies most impacted include UPC, Neoen, Wollar Solar and Canadian Solar, while Tilt and Goldwind will be most impacted in the utility wind segment.

COVID-19 Australia Projects

Construction slowdown in 2020 pre-COVID-19

The assessment further added that the renewable energy industry faced a host of grid challenges in 2019, including network capacity availability, commissioning issues, Marginal Loss Factors (MLF) and system strength variability, prior to the pandemic. These coupled with already challenging project economics have slowed the number of projects and associated capacity to break ground at the end of 2019. This sluggish trend continued into 2020 with less than 400 megawatts (MWac) breaking ground in the first quarter. With the additional challenge of COVID-19, the pace of construction has only slowed further since the end of the first quarter and developers now face a quagmire of infrastructural and economic obstacles.

COVID-19 adds cost and risk to projects

The majority of capital expenditures for utility PV and wind assets are for hardware, comprising about 60 percent of expenses for PV and 75 percent for wind. As hardware is typically priced in foreign currency, the plummeting value of the Australian dollar has had a substantial impact on project economics. Figure 2 highlights the trend in PV capex over time compared with the power purchase agreement (PPA) pricing. As expected, PPA pricing has followed capex down the cost curve. However as capex has increased with rising hardware costs, developers will be challenged to profitably meet PPA pricing. Furthermore, securing debt will be an obstacle in the short term, given that cash is now a scarce commodity; financiers are unlikely to lend cheaply.

COVID-19 Australia Projects

Financial close in question for up to 3 GWac of projects

At the beginning of 2020, Rystad Energy expected that 2 to 3 GW worth of renewable projects would achieve Financial Close and begin construction this year, including 1.1 GW of wind and 1 to 2 GW of PV. At present, 530 MW of PV capacity and 210 MW of wind capacity has taken a financial close and has either already begun construction or will do so in 2020. The impact of COVID-19 on project economics will likely delay or cancel the financial close of the remaining projects.

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Ayush Verma

Ayush is a staff writer at and writes on renewable energy with a special focus on solar and wind. Prior to this, as an engineering graduate trying to find his niche in the energy journalism segment, he worked as a correspondent for