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Job cuts due to Covid-19

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In the first quarter of 2020, global demand for energy declined by 3.8 percent, with most of the impact felt in March as containment measures were enforced in Europe, North America and elsewhere.

China, one of the countries most affected by the coronavirus, is the world’s leading manufacturer of many renewable energy technologies, such as solar panels, wind turbines and batteries. Given that coronavirus has disrupted deliveries from China, renewable energy companies are unable to reach deadlines for installing equipment.

BYD, one of the largest manufacturer of rechargeable batteries, was unable to complete production of new rechargeable battery models due to the pandemic, resulting in a decrease in rechargeable battery supply volumes for the European market.

These and many more factors have led to a spike in unemployment rates across the clean / renewable sector.

Latest US Department of Labor analysis found that nearly 600.000 employees from the clean / renewable energy industry filed for unemployment. The number of jobs lost is more than twice the amount of jobs generated since 2017 for renewable energy.

Before March, clean energy had been one of the biggest and fastest growing employment industries, growing 10.4 percent since 2015.

The theoretical projects that job losses will continue to grow in the coming months, unless Congress and the Trump administration take immediate and concrete steps to help the renewable energy industry and its staff. Unless nothing is done, the report estimates that by June 30, 850.000 renewable energy workers will have applied for unemployment.

A loss of this magnitude would mean that, in just six months, one in four clean energy workers employed at the beginning of 2020 will have lost their jobs.

Covid-19 will present major challenges for the U.S. wind industry, which is the biggest source of renewable energy in the U.S. with more than 114.000 jobs in the US economy.

The American Wind Energy Association (AWEA) published its initial estimate of how the virus would impact the wind industry, noting that the virus could jeopardize more than 35.000 jobs and place $43 billion in investment and payments to rural communities at risk.

“We’re assessing the many hurdles our members are facing in mitigating the disruptions from Covid-19. Protecting American jobs and economic investment and ensuring the safety of the wind workforce remain our primary objectives. The Covid-19 pandemic is harming the wind industry’s ability to build the wind farms envisioned by Congressional legislation and putting at risk 35,000 wind energy jobs.  To best protect these jobs and the health of our existing workforce, we are asking Congress to immediately extend the schedule and improve the liquidity of our existing tax credits.”

Tom Kiernan, CEO AWEA.

Covid-19 puts at risk an additional 25 GW of wind projects, which represents $35 billion in investment, according to AWEA research. It involves the possible loss to rural communities of over $8 billion in the form of state and local tax payments and land-lease payments to private landowners, as well as the loss of more than 35.000 jobs, including wind turbine technicians, construction workers and manufacturing employees.

The solar industry in America was not spared as well. The Solar Energy Industries Association (SEIA) is expecting to lose nearly 114.000 jobs in the US solar industry through June, representing 38 percent fewer jobs than pre-Covid-19 estimates.

Instead of rising from a base of 250.000 jobs at the end of 2019 to 302.000 jobs (as projected), SEIA is now expecting a fall in total US solar employment to 188.000 by the end of June.

SEIA is also expecting to see 1.725 megawatts (MW) less than planned in solar power construction in the second quarter of 2020— from April to June — marking a 35 percent decline from its pre-Covid forecast.

Covid-19 is hitting this segment of the solar market the hardest because of shelter-in-place orders, social distancing, local permitting delays and the severe financial uncertainties that many families are currently facing. This also has a major effect on smaller local solar companies, which have a far more difficult time weathering the financial storm than bigger corporations.

Renewable energy could be a big source of jobs in Australia over the next few years – but there are very different trajectories depending on the Covid-19 government stimulus initiatives and wider climate policy. The renewable energy market could generate 20.000 new jobs in the next five years, or lose 11.000 jobs by 2022, depending on policy decisions now taken.

Overall, Europe has seen little job cuts along the supply chain for the wind industry.

We saw temporary plant closures in Spain and Italy during the so-called “first wave” of Covid-19, as both countries announced that only “important” industries were to remain open, while all other industries (such as the wind industry) were to close in order to prevent the spread of the virus.

The Covid-19 effects could only become visible in the latter half of 2020. And of course a second wave ought to be stopped so that new emergency lockout measures can be avoided.

We have seen different developments recently. On the one hand we see businesses take the optimistic signals of a “climate recovery” from European governments and EU members to invest in new employment and new plants, for example Nordex SE who started construction on a factory for the production of concrete towers for its turbines.

The factory will offer jobs for around 300 employees while creating a further 200 jobs with local component suppliers.

On the other hand, we saw the first firms closing factories arguing that Covid-19 had an impact on their production and that they needed to react to changes in immediate demand, for example Siemens Gamesa who closed their factory in Aoiz, Spain, leaving 239 people unemployed.

Vestas, a world leader in turbine manufacturing, also cut 400 jobs, citing uncertainty caused by the coronavirus pandemic.

“Wind energy installations for 2020 are expected to be 30% down compared to industry forecasts. This will depend on the how quickly activity can ramp up in the most heavily impacted countries – Spain, Italy. And on the disruptions in the global and European supply chains. The supply of components and materials from China is now ramping back up after the interruption in February, but other bottlenecks remain e.g. India. Any continuous restriction to movement of goods and people is expected to slow activity and to drive up capital expenditures (CAPEX).”

WindEurope.

The European Council adopted conclusions regarding the EU energy sector response to the Covid-19 pandemic. Above all, the Council expresses its gratitude to energy sector workers for their committed and successful efforts to ensure the continuous functioning of the European energy network during the Covid-19 pandemic.

The European Commission unveiled a €750 billion ($826.3 billion) package which it says will put fighting climate change at the heart of the bloc’s recovery from the coronavirus pandemic.

The solar industry in Europe will see a short-term delay in projects says Michael Schmela, executive advisor and head of market intelligence at SolarPower Europe.

“The impact of COVID-19 will be felt across all European industries. In the solar sector, we will see a short-term delay in projects due to the supply of materials, as well as a demand slowdown due to the European lockdown. However, in the medium- to long-term, the sector looks to undergo a quick recovery, especially if national energy and climate ambitions are maintained. For now, we must ensure that any European stimulus package favours clean energy technologies, making it a green recovery with solar and renewables as the backbone, which can further bring local clean jobs and vast economic and environmental benefits.”

Michael Schmela, executive advisor and head of market intelligence at SolarPower Europe.

Same as with the wind industry, the full impact of the Covid-19 pandemic on solar could become visible in the latter half of 2020.

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