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Coronavirus hits renewable energy supply chains

Companies in the renewable energy industry have begun reporting disruptions from the coronavirus outbreak in China, though the extent of the potential economic fallout in the sector is still unclear.

"[Logistics] internally in China is becoming very difficult," REC Silicon ASA President and CEO Tore Torvund said on a Feb. 14 earnings call. "It's very difficult to move material."

Torvund, whose Norwegian company operates a joint venture making polysilicon in China, offered the assessment on the same day that Beijing imposed a 14-day quarantine requirement for anyone entering the city.

Murali Subramanian, president of Azure Power Global Ltd., told analysts Feb. 12 that the India-headquartered solar project developer has started receiving force majeure notifications from some equipment suppliers as a result of the fast-spreading virus, which is officially called 2019-nCov.

"While we don't expect this to have much effect on our operations for the next couple of months, if the supply chain is indeed affected for a prolonged period of time, we believe that the force majeure process in our power project contracts will allow us extensions on our projects under construction without any penalty," Subramanian said.

Consultancy Wood Mackenzie on Feb. 7 said the outbreak could delay equipment deliveries as far out as late in the second quarter. "The longer strict public health measures stay in place, the more likely it is that prices will be pushed higher in the second half of 2020," said Xiaojing Sun, a senior research analyst on Wood Mackenzie's energy transition team, noting that the firm had forecast that a market glut would depress panel prices this year.

"There are some shortages within China," SunPower Corp. Chairman, President and CEO Thomas Werner told analysts on Feb. 12. "And, of course, the China supply chain supplies all of solar."

William Siwek, president of TPI Composites Inc., which makes blades for wind turbines, said the virus is likely to cause "a bit of a negative drag" during the first half of the year. But the company "can't reasonably predict the impact" yet, he added.

"Our best estimates right now are that our plants will reopen on or about March 1, with limited capacity at that point," Siwek said at an analyst day Feb. 7. "The challenge here is ... the mobility of our employees as well as logistics around supply chain."