COVID-19 has caused a lot of uncertainty about what it can mean for the renewable sector in Spain. Last April 6, ATA Insights organized a webinar entitled «The Impact of COVID19 on the Renewable Industry at an International Level» in which, among other speakers, Kim Keats, Director of EKON Strategy Consulting participated.
One of the first effects that Kim Keats pointed out, was the drop in demand for electricity, which you can clearly see in the data published by organizations such as REE and ENTSO-E.
Furthermore, even before the crisis, natural gas prices showed a downward trend. This double impact worsens the economic prospects for renewable energy.
Kim Keats warns that if things do not change, it will be necessary to control the renewable development plans in the medium and long term. In particular, the expansion of capacity foreseen in the NECP would lead to average prices captured by wind and photovoltaic well below its normalized costs (LCOE).
This leads to a «missing money» problem; referring to the fact that the prices do not adequately reflect the value of the investment. If we do not return to the previous status quo, the plan and its implementation need adjustment.