Enel‚Äôs net ordinary income has gone up by 17.4%, with revenues increasing to ‚ā¨80.3m in 2019 from ‚ā¨75.5m in 2018.
In a press statement released yesterday, the Italian utility highlighted that the network, renewable and retail sectors were the group‚Äôs main drivers.
Infrastructure and networks operations in Latin America ‚Äď especially due to the acquisition of subsidiary Enel Distribui√ß√£o S√£o Paulo ‚Äď were among the main reasons for the revenue increase. Increased trading operations in Italy also generated ‚ā¨3m.
The company‚Äôs ordinary earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 10.8%, amounting to ‚ā¨17.9m in 2019.
The ordinary EBITDA increase, said Enel, is attributable to a ‚ā¨91m increase in the margin of Enel‚Äôs renewable subsidiary Enel Green Power, as well as a ‚ā¨34m increase in the margin of energy transformation provider Enel X.
Enel is unlikely to be excessively hit by the Covid-19 pandemic, said the CEO Francesco Starace.
In a conference call with analysts, Starace highlighted how operations, both regarding employees and assets, will continue to run smoothly, defining Enel as a ‚Äúfinancially solid‚ÄĚ group.
Starace said: ‚ÄúIf our people and assets are able to face the crisis, our business will minimise risks both on a micro and macro level. Thanks to our business‚Äôs resilience, we can‚Äôt see any delay in our strategic planning, both in the long and short term.‚ÄĚ
As reported by Bloomberg, Starace also added that the Covid-19 pandemic will not hinder efforts to transition to renewable energy.
He said: ‚ÄúThe development of renewables has not slowed down. If in a few months, we have got the health situation under control, many investments will have to be accelerated.‚ÄĚ
Canadian Solar, the world‚Äôs fifth-largest solar PV module manufacturer, has stated limited impact of the Covid-19 outbreak on its production facilities. The company, which has almost 73% of its manufacturing capability located in China, had faced severe disruptions from mid-January by way of capacity loss amid the Covid-19 carnage. The company‚Äôs share has devalued by more than 36% since January 15, 2020.
Globally, China is the biggest manufacturing economy that comprises of solar PV equipment manufacturing. The solar sector is expected to face the heat, given the tight capacity in solar equipment manufacturing. Of the top ten solar PV manufacturers (in terms of module shipments), the majority of them are China-based. These include Jinko Solar, JA Solar, Trina Solar, LONGi Solar, Risen Energy, GCL System and Suntech. Coronavirus-hit province Zhejiang is home to a few of JinkoSolar‚Äôs manufacturing works, the largest Solar Module Super League (SMSL), while JA Solar is also involved in manufacturing operations in this province.
While the country is beginning to get back to work at a slow pace after the coronavirus outbreak, many factories have not yet started operating at full capacity due to shortages of staff and raw materials. Solar PV manufacturers such as Trina Solar have alerted about production delays and LONGi Green has commented that there is no significant outcome on its solar PV panel sales and production, and its shipment targets will also not witness any change for this year.
On the contrary, Canadian Solar‚Äôs manufacturing subsidiaries in China are located in Changshu, Jiangsu province, which has not been seriously impacted by the Covid-19 outbreak, hence were able to resume the production post extended Chinese New Year holidays.
In a company statement, the company stated that the impact on its delivery schedule is mostly limited to the capacity loss in the last week of January and the first ten days of February. Since mid-February production has been restarted and, with limited cases where the shipment schedule and/or product model needs amending, the company is now settled to make up for the lost production.
Canadian Solar is scheduled to announce its Q4 earnings result on March 26 2020, and it is to be seen if the Covid-19 pandemic in other countries and regions has any impact on the company‚Äôs order book and shipments. The company also has been preparing for any impact on the cross-border logistics and project construction timelines based on different country plans regarding self-quarantine and complete lockdowns amid this pandemic outburst.
The UK Government is adopting all measures to tackle the adverse situation that might arise due to the ongoing spread of Covid-19 virus. This includes The Health Protection (Coronavirus) Regulations 2020 that have been put in place to reduce the risk of further human-to-human transmission by keeping individuals in isolation.
The government also issued a ‚ÄėStay at home guidance for households with possible coronavirus infection‚Äô on March 12. As of 9am on 16 March, 44,105 people had been tested in the UK, of which 42,562 were confirmed to be negative and 1,543 tested positive. The risk level to the UK has been raised to high.
As many of the working population are preparing to work from home, the electricity demand pattern is expected to take a new shape. It is widely anticipated that the electricity demand in the coming weeks and months will largely resemble the consumption pattern on the weekends as more people stay at home.
According to an analysis by National Grid Electricity System Operator, demand across the UK would reduce if people continue to work remotely from home for another two months. It further anticipates the demand from the residential sector to increase and there could a sharp fall in the demand from commercial and industrial sectors. As a proactive measure, the National Grid has restricted its regular workforce from entering the control rooms to prevent any possible spread of the virus to its emergency response and critical operations teams.
Energy Networks Association (ENA), which represents UK electricity and gas network companies, has made a recent announcement that well-practised contingency plans are in place to ensure the companies render service continuously across the areas they serve. This includes adequate training of the manpower and systems needed to tackle outages or peak demand situations. The contingency plan also includes temporary camping at a specified place as required, where critical response teams will have adequate spares, food and bedding to ensure smooth system operations.
According to the latest report by the UK‚Äôs electricity regulator, the total annual electricity demand in the country stood at 352.1TWh. In terms of proportions of electricity demand by the consumer category, domestic demand has the largest share at 30%, followed by industrial demand at 26% and commercial demand at 21%.
The domestic demand includes residential customers whose consumption is generally high in the evening when most people are back from work. The consumption of the commercial and industrial sectors is high during the day. Experts believe that the total demand across the country will fall in coming days, mainly factored by the considerable reduction in industrial and commercial demand, which would likely be higher than the increase in domestic demand as people stay at home.
Globally, Covid-19 has affected the sourcing and supply chains across the power industry. Most of the Asian suppliers of renewable sector equipment are operating with a reduced load, and the developers in India, South Korea, Central Europe and others are witnessing logistical delays. However, the industry is not able to predict the long-term impact of Covid-19.
The coronavirus (Covid-19) outbreak has caused a slowdown of China‚Äôs economic growth. The International Monetary Fund has cut China‚Äôs gross domestic product (GDP) growth outlook by 0.4% to 5.6% but also alerted of further alterations, taking into account the extent and magnitude of the impact of the coronavirus outbreak.
The current scenario in the country is going to have an effect on its power demand and generation. China is a world leader in renewable energy investment. The country has proved itself as a leader in wind power installation, wind turbine manufacturing and solar photovoltaic (PV) manufacturing.
The country‚Äôs renewable power sector is experiencing the impact of the Covid-19, specifically wind and solar PV, which could witness lower capacity additions in Q1 2020 due to suspended manufacturing and construction works.
China is a leader in terms of solar PV installations and the production of solar PV panels. The country has the largest installed solar power capacity of more than 205GW, contributing more than 35% of the global installations. China‚Äôs annual installation was expected to be approximately 30GW in 2020 and the outbreak is likely to impact solar installations at the end of the year in 2020.
Globally, China is the biggest manufacturing economy, including solar PV equipment manufacturing. The solar sector is expected to face the heat, given the tight capacity in solar equipment manufacturing. Of the top ten solar PV manufacturers in terms of module shipments, the majority of them are China-based. These include Jinko Solar, JA Solar, Trina Solar, LONGi Solar, Risen Energy, GCL System and Suntech. Coronavirus-hit province Zhejiang is home to a few of Jinko Solar‚Äôs manufacturing works, the largest Solar Module Super League (SMSL), while JA Solar is also involved in manufacturing operations in the province.
Post Covid-19 outbreak, the Jiangsu province in China took the hardest hit in terms of solar PV production capacity as more than 60% of the country‚Äôs solar PV panels are made here as per the Gofa institute, a part of the Chinese government‚Äôs National Energy Administration (NEA).
The key manufacturing hubs in the Jiangsu province include Canadian Solar, LONGi Group, Trina Solar, Q-CELLS and JA Solar. Due to the outbreak, the solar power market has concerns with regards to material supply shortage and logistical restrictions due to closed borders, which could increase the price of solar modules that otherwise was rapidly plunging. The shortage will delay equipment deliveries and affect the solar sector‚Äôs global supply chain.
While the country is beginning to get back to work at a slow pace after the coronavirus outbreak, many factories have not yet started operating at a full capacity due to shortage of staff and raw materials. Solar PV manufacturers such as Trina Solar has alerted about production delays and LONGi Green has commented that there is no significant outcome on its solar PV panel sales and production and its shipment targets will also not experience any changes this year.
The NEA and the State Grid Corporation of China (SGCC) have notified about the threats coronavirus outbreak poses to the power industry and the Chinese Photovoltaic Industry Association (CPIA) has recommended the Chinese government to delay connection deadlines of large-scale solar power projects on March 31 and June 30. In the current situation, late project completion will impact the amount of subsidies received.
The coronavirus outbreak will affect the overall supply chain and solar installations not only in China but globally, mostly the in the US and other countries such as India and Australia, heavily dependent on Chinese raw materials and components. Many solar manufacturing plants located outside of China are dependent on Chinese imports for raw materials such as aluminium framing and solar PV glass.
With more than 75GW installed as of 2019, the US is majorly dependent on solar PV panel production from China. The country is already facing supply bottleneck since the extension in PTC and ITC granted in December 2019. The Q1 production delays due to extended Chinese New Year Holidays as a result of the coronavirus outbreak will worsen the situation for the US developers who will be forced to look out for alternative sourcing avenues.
Global and regional markets are experiencing a negative sentiment as the Covid-19 pandemic sets out economic stagnation among several countries. Covid-19 spread across US and Europe has resulted in new levels of market volatility.
Covid-19 has so far affected the technology companies involved in sourcing semiconductors, chips, auto-parts and software globally. However, the impact is set out to reach all businesses, including large Industrial houses and conglomerates such as General Electric (GE), Siemens, Honeywell, 3M and Mitsubishi Electric.
In a recent investor call, GE discussed its updated outlook for 2020 and 2021. The company expects a negative impact of $300m-$500m to its overall industrial segment‚Äôs Q1 2020 free cash flow due to coronavirus. The company has been working to address various internal and external challenges, including geopolitical pressures, increased adoption of renewable off-grid systems, issues with project execution and excess capacity in the industry.
Over the last two years, GE has been engaged in a huge restructuring in the electric power market. In October 2018, the company split its power segment into two divisions ‚Äď a gas power division and the second division that combines other power businesses, including steam, grid solutions, nuclear and power conversion.
In January 2019, the units that were handling electricity transmission and distribution, battery storage and solar power were moved from GE‚Äôs power segment to renewable segment. The renewable segment had previously handled the on and offshore wind turbines and hydropower and now manages the solar, battery and grid portfolio to deal with the transition towards clean energy and off-grid systems.
In 2019, the company‚Äôs conventional power segment recorded revenues of $18.6bn and a segment-level profit margin of 2.1%, while the renewable segment recorded revenues of $15.3bn and a loss margin of 4.3%.
In its recent investor call, GE mentioned that the company expects slight growth in the power segment‚Äôs revenues in 2020 and flat growth in 2021, with an improvement in the segment-level margin. GE‚Äôs power segment is expected to return to positive free cash flow in 2021, following years of negative numbers, including 2020.
The renewable segment forecasts that the capacity addition in solar, wind and new technology will continue to reduce the levelised cost of energy in the renewable market. GE is prepared for the clean energy future by keeping a comprehensive portfolio i.e. generation, storage and transmission capabilities under the same roof.
In the renewable segment, the company expects slight growth in 2020 and better growth in 2021, with an improved negative margin in 2020 and a break-even in 2021.¬† GE‚Äôs renewable segment is expected to operate at negative free cash flow in 2020 and 2021. Managing the coronavirus impact on GE‚Äôs global supply chain will be a top priority for the renewable segment.
In the renewable segment, which operates the offshore wind turbine business, the company is confident about improving the segment‚Äôs overall operating margin. GE recently launched its 12MW turbine, Haliade-X, offering the best global energy conversion efficiency.
The renewable segment has commitments to some of the biggest global offshore players, including Orsted and Equinor-SSE. GE has been selected for approximately 5,000MW of capacity in Europe and the US. In addition to managing Covid-19 volatility, the company considers stronger project execution and operational improvement as its top priorities for 2020.
The novel coronavirus (Covid-19) outbreak has led to a slowdown of economic activities in China, including in the wind industry.
The International Monetary Fund (IMF) has cut its growth outlook for China by 0.4%-5.6% but also warned it could further revise its figures, considering the duration and the magnitude of coronavirus impact. The Covid-19 pandemic is expected to affect the country‚Äôs power demand and generation. Renewable energy additions are likely to be lower as a result of the suspension of manufacturing and construction activities in the first quarter of 2020. China has the largest installed wind power capacity, registering more than 230 gigawatts (GW) and contributing more than 35% of the global installations.
The wind sector is expected to face serious consequences, given the small capacity for wind equipment manufacturing, as well as engineering, procurement and construction (EPC). China‚Äôs annual installation was expected to be around 24GW in 2020 and the outbreak is likely to impact installations equivalent to 2GW in 2020. The supply of raw materials and components to countries outside of China is expected to be similarly impacted. Production stoppage and supply and logistics issues are likely to create order backlogs in the first and second quarter delivery schedules.
According to China‚Äôs National Energy Administration (NEA) industry survey on the impact of Covid-19, the major Chinese turbine original equipment manufacturers (OEMs), such as Goldwind, Envision, Mingyang, Shanghai Electric, three foreign turbine OEMs Vestas, Siemens Gamesa and GE Renewable Energy and major component manufacturers, including NGC, Winergy, ZF Wind Power, Yongji and Vertiv had all reportedly resumed their production in the week beginning 10 February. However, facilities are not yet operating at their full capacity due to the quarantine and most of the office work is done remotely from employees‚Äô homes.
As per the latest update on coronavirus, the number of cases has fallen to single digits in Wuhan, Hubei, but it is still critical to monitor the virus across the country and globe as it is not clear by when the situation will stabilise.
China is also considering extending the onshore wind feed-in-tariff deadline, which is supposed to expire on 31 December 2020. In such a situation, the Chinese wind industry is expected to witness a higher rate of installation in the second half of 2020 to capitalise on the feed-in tariff (FIT). Manufacturing is also likely to increase in order to partially offset the losses incurred during the first half.
The coronavirus outbreak will impact the overall supply chain and installations not only in China but globally, mainly the US and other countries heavily dependent on Chinese raw material and components.
The US, with more than 100GW installed as of 2019, is majorly dependent on wind turbine parts from China. The country is already facing supply bottleneck following the extension of production tax credits (PTCs) and investment tax credits (ITCs) granted in December 2019. The first-quarter production delays due to Chinese New Year, coupled with coronavirus outbreak, will worsen the situation for US developers, who will be forced to search for alternate sourcing avenues. A total of more than 5GW of installations aiming for a 2020 commercial operation start-up have been identified as being ‚Äúat-risk‚ÄĚ.
As per the latest General Electric (GE) report on coronavirus, the company has around 18,000 employees in China, with 2,000 in Hubei province. China contributes nearly 9% of the company annual industrial segment revenues. The company has resumed its operations at reduced capacity at both GE and its suppliers. It estimates this will have a $300m-$500m impact on its free cash flows and $200m-$300m on its profit margin in the first quarter of 2020. It specifically said it was too early to estimate the actual impact of the coronavirus outbreak, which is likely to worsen in the coming months if the situation is not brought under control.
Similarly, other foreign companies with facilities in China are experiencing workforce unavailability and scarcity of raw materials, components and logistics support required to operate and fulfil their supply commitments.