Greentops and other Renewable energy companies warn the pandemic has caused major disruptions to supply lines / Nir Hasson, 20.5.2020
Just before the pandemic erupted, the global energy market appeared to be striding toward a revolution. After years of effort, technological advances, a steep drop in the cost of renewable energy production and mounting climate crisis awareness spurred many countries to invest in wind power and solar energy. Some of the most advanced nations, like Germany and the Scandinavian countries, already get a significant percentage of their electricity from non-polluting sources.
Even Israel, which lagged behind for years, had begun to switch direction in the months before the coronavirus spread and to promote investment in and construction of solar energy plants. The Energy Ministry set a target of having 10 percent of national energy consumption come from renewable sources by 2020 and 30 percent by 2030. But the virus crisis slowed this momentum, not just in Israel, and now the target dates may be pushed off.
Renewable energy can come from different sources, including wind and water. But in Israel the focus is on solar energy. The first problem caused by the virus outbreak was a halt to production in China, which manufactures more than 90 percent of the world’s solar panels. That problem was compounded by the halt to exports due to the lockdown, disrupting numerous projects.
Consequently, executives at several renewable energy companies in Israel have been warning of a possible collapse of business and a wave of layoffs. Dani Danan, CEO of Greentops, which builds electricity-producing solar energy systems for installation on the roofs of large commercial buildings, says: “We want to meet the targets but the supply chain was cut off. February’s delivery will arrive in June.”
Danan and others in the field are critical of the Electricity Authority, accusing it of ignoring the hardships now facing the renewable energy companies and being unwilling to postpone government tenders for the construction of solar power plants.
“In such an extreme situation, we’re not asking for money. We just said, give us dates that are attainable,” Danan says. Of the 5,000 Israelis employed in 150 renewable energy companies, some are already expected to lose their jobs due to the pandemic, and the fear is that the collapse of companies could lead to long-term disruptions in Israel’s transition to renewable energy.
For the Electricity Authority, the delay could mean failure to meet the targets set by the Paris Climate Accord. The authority rejects the companies’ claims and says, “Right at the start of the crisis, the authority decided to extend all the requisite dates (by three months) for building the renewable energy production plants” and that “this is the correct balance between the companies’ needs at this time and the authority’s need to advance the production of clean electricity and meet the government targets for the benefit of all Israelis.”
The pandemic has caused other problems for the industry as well. Dr. Tareq Abu Hamed, academic director of the Arava Institute and an expert on renewable energy, explains, “The social distancing is a problem too, because people won’t open their homes to have panels installed on the roof and business owners are thinking twice about investing in solar energy systems. Everyone is waiting right now.”
Climate issues out of the limelight
Environmental activists says global attention to climate issues has practically disappeared during the pandemic. Before, it felt like they were getting their message across, but now the public agenda has changed dramatically and governments are less attuned to the climate issue.
What really worries green energy companies and activists worldwide is that the crisis will lead governments to reduce or totally cease investment in renewable energy, and that the field’s profitability will decrease due to the economic shock waves. The collapse of world oil prices could delay the advent of electric cars, with fuel prices having dropped very low, says Dr. Amit Mor of the International Disciplinary Center in Herzliya.
In an interview with The Guardian, Professor Dieter Helm of Oxford University said that to ensure the economic recovery of green energy, governments will have to outline clear policy and follow through on it. “This is where the carbon tax comes in. Now is the moment,” he said.
The long run
Despite all these problems, some in the field remain optimistic. Mor, for one, thinks that renewable energy will triumph in the long run.
“For two years now, the price of electricity produced from the sun or wind has been significantly cheaper than that produced from gas or coal. In the coming decade, energy storage is going to develop and then we’ll rapidly get to a world that can disconnect from energy based on fossil fuels. The crisis will cause delays but, in the end, the economics will be undeniable,” says Mor.
Eitan Parnass, director of Israel’s Green Energy Association, believes the crisis will actually accelerate growth in the solar industry. “Solar energy is part of the growth programs of the developed economies. Also, the coronavirus has taught the world how real and dangerous a global crisis can be. It’s just a matter of time until the climate crisis is back to being the main issue on the world agenda and solar energy is the main way to wean ourselves from fossil fuels.”