COVID-19 Hinders Global Clean Energy Sector as Chinese Battery Production Capacity Set to Fall by 10% in 2020, says GlobalData

Manufacturing in the global clean energy sector, including renewable energy, battery energy storage, electric vehicles (EVs), and the renewable heat and cooling markets is highly reliant on production from China.

The pandemic is expected to reduce Chinese battery manufacturing capacity by 10% in 2020, a shortfall of around 26 GWh of output in China's planned manufacturing capacity this year, says GlobalData, a leading data and analytics company.

Somik Das, Senior Power Analyst at GlobalData, comments: "With COVID-19 causing a slowdown of China's production output and economic growth prospects, the countries position as a global manufacturing hub is directly hurting international markets such as the clean energy sector where it is a battery manufacturing powerhouse."

China's major Li-ion manufacturing players, CATL and BYD, are facing potetnial disruption to production facilities located in COVID-19 hit provinces as limitations are imposed on labour movement.

Das continues: "Several energy storage companies have rearranged their equipment lines or supply chains owing to a shortage in the workforce because of the pandemic. The Chinese EV charging infrastructure market have been negatively impacted by this, experiencing a set back with respect to battery storage capacity addition.

"However, backed by the Chinese Government, CATL and BYD, two of the largest battery manufacturers in China, have been widening their production capacities abroad."

China's battery manufacturers, supported by the government's industrial expansion vision, are expected to build and commission massive battery production plants in the next decade. At the end of December 2019, 88 of the 115 global battery mega factories in pipeline construction with completion by 2029 were in China. China also dominates the planned Li-ion pipeline installed battery storage capacity with 564 GWh by 2028 compared to Europe's 348 GWh capacity by 2029.

Das adds: "The scene should improve soon. Slowly and steadily as China makes its way out of the pandemic the battery storage sector is expected to pick up the pace as the Chinese battery manufacturers return to business as usual and make up for lost output in the second half of the fiscal year."

GlobalData | https://www.globaldata.com