L R AS Published on Tuesday 24 March 2020 - n° 314 - Categories:PV Watch

A look at how the world has been turned upside down by the coronavirus

All about health! All about health!

This affects the economic world

Measuring the effect of this coronavirus is still underestimated.

What about photovoltaics?

In one week, the world has turned upside down; there are some notes of hope

It is only a week since the containment has spread throughout France to prevent the spread of the coronavirus. Only one week! It seems like an eternity, so much so that the information only revolves around the epidemic, the number of contaminated people, the number of deaths, the testimony of the efforts of doctors, the measures to be taken, the ministerial or presidential interventions.

All about health! All about health!

You can't blame it, but at least see it. Economic life and the future have taken a back seat. Exactly, they no longer exist. The cost of health and the cost of the measures taken are systematically underestimated as if we didn't want to scare the population, both French and global: two billion people (out of the seven in the world) are subject to confinement. Despite this measure, new countries are extending this measure as the only one to prevent the spread of the epidemic. This for 16,000 deaths (to date) in the world!

This affects the economic world

The economic world is feeling the effects of this measure of isolation, of prohibition to meet and also to work in groups. If teleworking measures are advocated, factories are put on short-time working and even shut down to prevent employees from coming into contact with each other, and to prevent the spread of disease. The list of prohibited activities that bring people into contact with each other is getting longer and longer: restaurants, cafés, bars, discos, gyms, hotels, theatres, cinemas, art galleries, shopping centres, craft fairs, museums, musicians and other artists, sports venues (and sports teams), conference halls, etc.rence (and event organisers), cruise lines, airlines, public transport, schools and universities, day-care centres, and recently open-air markets are or will be durably affected.

This containment has massive effects on the economy. The best known example is that of the airline companies which have stopped almost all their flights. They have the financial burden of renting aircraft, airport and staff costs. These costs continue to run while their revenues are zero. Car manufacturing is following the same path: PSA, Renault and Toyota have stopped some of their factories. Seat in Spain has stopped them; Volkswagen has stopped them all in Germany. According to the French Minister of the Economy on 23 March, the French industry is running at 25% of its capacity!!!

Measuring the effect of this coronavirus is still underestimated

These containment measures lead to the termination of all temporary contracts. On Thursday 19 March, the Prime Minister, in front of the Senate, acknowledged that the pandemic will provoke a " powerful, massive, brutal stop to our economy" and "will transform our life habits ".One figure allows us to measure the air hole: the temporary workers are expecting to lose more than 500,000 jobs at the end of March, that is to say a fall of three quarters of their workforce! Another worrying signal is that electricity consumption in France has fallen by about 15% since the beginning of the confinement, according to the RTE network manager, and by 20% according to the Minister of the Economy.

The French recession forecast for 2020 was announced at 1% about ten days ago. The effects of containment have not been sufficiently taken into account. The reduction in French gross domestic product in 2020 will be much greater. IHS Markit considers on 18 March (it is already an eternity) that the recession in Europe will reach 1.5%. Given the length of the confinements, the measures taken and the shutdowns of some companies that will have repercussions on other economic sectors, the economic consequences will be much greater. The leading forecasting institutes have estimated (as of 20 March) that the German recession will be between 1.3% and 9% in 2020, compared to a 5% decline in 2008.

What about photovoltaics?

The data is very fragmentary. Nothing or little is known in France: the delay in the next calls for tenders, the latest solar installations and new regulations have been announced. The effects of the epidemic on the profession don't seem to concern France!

SpainThe second European country most affected by the epidemic after Italy, is the subject of an article in GreenTech Media on 16 March (which is already old). It states that the renewable energy sector is less affected than the rest of the economy because solar and wind power continues to be produced without human intervention. The only danger would be that the reduction in demand for electricity would be so great that it would affect the injection of green energy into the grid.

The consequences of the Spanish containment, which is now in its third week, is the interruption of studies for new power stations, due to the stoppage of work by certain categories of employees among developers and above all among municipal or state administrative staff. Added to this is the virtual halt in maintenance activities for solar power plants already installed.

It is Germany that presents and summarises the repercussions of the epidemic on the photovoltaic sector in the most serious terms. Since February, the The restrictions on movement in Europe have had a massive effect on businesses within days of their entry into force. The effects are becoming more and more pronounced. Construction sites are coming to a standstill. As a result, many assembly workers from Eastern Europe return to their home countries because there are no more panels to install. It is also difficult to bring assembly tools such as cordless screwdrivers to construction sites, as equipment or components can no longer be easily transported across national or even federal borders.

Late deliveries of panels as well as a lack of installation personnel could have a negative impact on project completion. It still seems too early (as of March 20, the date of the article) for companies to estimate the extent of the impact. But any delay will cost plant owners a lot of money.

Logically, activity blockages occur when there is a need to contact or cooperate with administrative services. Some grid operators have announced that they will no longer accept connections for PV systems. This mainly concerns large-scale projects in Germany. Many municipalities or communities have suspended their meetings and sent their employees home. Project approvals have been postponed. Development plans are no longer being drawn up; external meetings necessary for the projects are not taking place. It is not known how long current measures to protect against the epidemic will be maintained.

The United States balance between favouring the health of the population and limiting the economic bill which climbs, climbs, climbs, causing disorders in the circuits which will be difficult to restore. The consequences will be bankruptcies so numerous that the whole of American democracy may be swept away.

Thus, in one week, the world has turned upside down; there are some notes of hope

- Renewable energies are emerging as a favourable solution. Not with regard to oil, which at $24 a barrel has fallen to a particularly low level, favouring the use of petroleum products: household consumption is stimulated, but this decline has a depressing effect on the whole economy if one considers the activities of searching for, exploiting and selling hydrocarbons. In the short term, many shale deposits will have to be closed following the bankruptcy of the operators.

- Financiers have discovered that solar or wind power plants were the best investment to make: it is not subject to coronavirus; it works without manpower; it is insensitive to the economic situation; its profitability is visible in the long term through supply contracts. As a consequence of this less risky nature, it requires less capitalisation (in the form of mandatory reserves) of equity in the banks' balance sheet. Already, some organisations are seeing an influx of financial investment proposals. This is confirmed by the good performance of share prices on the stock exchange, which are holding up much better than the rest of the market. From this, a future inflow of capital for the construction of new power plants can almost be predicted.

- Another reason for hope is that photovoltaic manufacturing activities in China are beginning to return to normal. There is 80% capacity utilisation across the entire supply chain in March. If supply has almost returned to normal, demand in March and April should also be normal, which is far from being the case. Only China is already out of the coronavirus if it is careful not to see a resurgence of the epidemic. This shows that each country can eliminate this virus.

Subscribe to the newsletter "Le Fil de l'Actu"...

Most read articles in the last 10 days