Based on international research conducted by global management consultancy firm Kearney, it is clear that profitability will be determined by excellence in project portfolio execution:

• Building portfolios around privileged assets with solid renewable resource and straightforward access to the power grid and prioritize efforts on the projects that have the greatest chances to progress economically.
• Adapting organizations to promote agile execution, with modular plant designs and layouts, strong permitting capabilities in key markets, and PPA expertise to speed up agreements with offtaker and project financing.
• Developing tool kits to flexibly cope with renewable intermittency and its impact on revenues, both on the demand side (access to market, ability to profile production curves, and price segmentation) and on the supply side (smart storage solutions and asset pooling).

The challenges ahead for renewable energy players remain largely the same, although the coronavirus pandemic will put to the test their skills, their resilience, and their depth of pockets.

This is according to Prashaen Reddy, a partner at Kearney and on the board of South Africa National Energy Association (SANEA), says that despite the global pandemic toppling the status quo, the outlook for renewable energy is still bright.

One thing we cannot forget is that energy is here to stay. Natural gas has been a major enabler of change to a cleaner energy mix, especially in the power sector. Gas has steadily displaced coal for baseload generation and has been integral to enabling the dramatic growth of intermittent renewable electricity sources, such as solar and wind. With carbon emissions half that of coal, natural gas has received relatively little credit for lowering emissions.

When the COVID-19 pandemic starts slowing down, governments, public administrations, and healthcare associations around the world will need to draw the right conclusions to protect us from any future outbreaks. Equally so, the renewables sector will play an important role in focusing on driving the country towards a green and sustainable economy.

Although the magnitude of the impact of COVID-19 on projects, developers, utilities and equipment manufacturers is still unclear, the medium-term fundamentals are optimistic, as the Kearney research shows.

We look forward to making Prashaen Reddy available to answer your questions on this research and to unpack the lessons that South Africa can draw from it.