Will the wind energy industry for once not be hard hit by a global crisis?
The world is still experiencing a health and economic crisis due to coronavirus disease 2019 (COVID-19). However, since many countries have succeeded in controlling the virus (for now), lots of measures have been eased and some have been lifted. The economic effect that the lockdowns have had on (local) economies is devastating. It is expected that in the first half of 2020 the European economy will decrease by 10%, and although a recovery is expected in the second half of 2020, a decrease of 5% is expected for the year. In the short term the wind industry is also affected by, for example, supply chain issues, closure of manufacturing facilities, and delays in project execution. However, in the long term the wind industry (and other renewables) might dodge the bullet this time.
Governments are putting together stimulus packages to get their economies back on their feet and already, globally, projects worth a total of more than $ 10 trillion have been announced or launched. Organisations and associations active in our industry have been lobbying to make the transition to green energy a centrepiece of these plans. And it looks like the lobbying is paying off.
The US treasury department issued a notice that the Investment Tax Credit (ITC) and Production Tax Credit (PTC) will be extended for one year. The notice relates to the safe harbour deadline for renewable energy projects that began construction in 2016 or 2017. Under the old rule, these projects would have needed to become operational by the end of 2020 in order to claim the full 30% ITC for solar projects or the full 2.5 cents per kWh PTC for wind projects. The treasury department’s announcement gives developers one more year, until the end of 2021, to begin generating power. This will likely help projects that are facing delays due to COVID-19.
In January, the European Commission introduced its Green Deal. With this plan the European Union aims to mobilise € 1 trillion in investments over the next 10 years to support the transition towards climate neutrality by 2050. It looks like the Green Deal will be an important part of the recovery strategy, which consists of two elements – a new EU budget for 2021–2027 and a new recovery fund – amounting to € 1.85 trillion of total investment.
The green transition is the main driver of economic recovery in this strategy according to the plans presented. The strategy even singles out wind energy as one of the ‘policy fundamentals of the recovery’ and the goal of the commission is that by 2050 the continent’s electricity will be generated by wind energy. These long-term plans mean that companies can invest in facilities, create jobs and grow. Finally, it is the long-term vision that we have all been asking for all these years. Let us hope that other parts of the world follow Europe by putting together plans for a green transition as well – let’s make this world a better place by going green!
Let me end my note like last time: Stay safe, healthy and above all positive!
Enjoy reading,
Floris Siteur
Publisher
Publisher
