Virus May Nix 39% of Projects to Build New U.S. Power Plants
Covid-19 Seen Canceling Up to 39% of New U.S. Power Generation
(Bloomberg) -- More than a third of new U.S. electricity generation expected to come online over the next six months could hit roadblocks as the coronavirus pandemic curbs power consumption and disrupts supply chains.
About 4.9 gigawatts, or 39%, of new utility-scale capacity will be “either canceled or indefinitely postponed” from April through September, said Energy Information Administration economist Tyler Hodge. Wind, solar and natural gas projects will be affected relatively evenly. States with the largest slated additions during the period are Texas, California and Pennsylvania, he said.
“Supply chains, including both international and domestic, have been disrupted to some extent,” said Hodge.
| Power Source | Megawatts Affected | Share of Delays |
|---|---|---|
| Solar | 1,673 | 34% |
| Wind | 1,638 | 33% |
| Natural Gas | 1,550 | 31% |
| Other | 87 | 2% |
The potential slowdown of new power supplies is a blow to the renewables industry that has become more competitive against low-cost gas. The broader U.S. electricity sector is bracing for demand to plunge as businesses and industrial facilities remain shuttered amid widespread lockdowns to contain the virus. Total power consumption is expected to fall 3% this year compared with 2019, the EIA said in its monthly Short-Term Energy Outlook.
“The impact of the pandemic on the real economy is going to be severe, at least in the short term, and will put a damper on capital expenditures throughout the economy, including on solar, wind, and battery power,” John Tobin, a Cornell University professor who focuses on corporate sustainability, said in an email.
©2020 Bloomberg L.P.