寄稿

Impact of Covid-19 on
power projects
Martin Chesson
Thermal generation, Global practice leader
Mott MacDonald
On the face of it, the power generation sector has
remained relatively unscathed by the global
coronavirus pandemic – plants continue to generate
electricity and the lights remain on. Scratch beneaththe surface and you’ll find that Covid-19 is having asignificant impact, with many projects in development
or construction stalled.
We continue to work with our clients to solve
immediate challenges, but now is also time forowners to review their plans for the future, andensure they remain robust. Taking a fresh look is
also an opportunity to see whether the plans can be
improved, so future assets are more resilient, more
efficient and higher performing. Nobody knows
how long this crisis will last or the exit strategies
different governments will select, so it is importantowners build as much flexibility and resilience aspossible into their projects.
Here, we review the technical and commercial
effects so far of the pandemic on renewable andconventional power projects in Europe, Africa andSouth America, and suggest how owners might
best navigate the months ahead.

Projects in development
Media reports indicate that investors regard power asa secure sector during the current crisis. This view is
supported by the steady stream of enquiries we havereceived from developers and investors still interested
in progressing new power generation projects – albeit
with a degree of caution.
Our project development activities also continue,
even though many of us are working differently. In
only a few days, more than 8000 colleagues acrossEurope made the seamless transition to working fromhome, so they keep developing designs and negotiating
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contracts.
It is more challenging to carry out site investigations
and environmental surveys, and we’ve changed ourapproach, postponing visits where it is not possible towork safely. We always start by asking whether ourphysical presence on site is essential at the current time.
Meanwhile, construction ready projects are inlimbo and some financial close dates have been
pushed back to later in 2020. Disruption to supply
chains, and the likelihood that many may take time torecover, coupled with ongoing restrictions on travel
have made it difficult for contractors and suppliers toproperly price risk, and owners are understandably
reluctant to take on the risk.

Projects being built
We have witnessed the biggest impacts during theconstruction phase.
Lockdowns have affected supply chains, withsome slowing and others suffering indefinite delay.
The specific issues and magnitude of the impacts
differ across projects and technologies. The pandemic
has highlighted the downside of producing key
equipment in just a few locations. The lockdown inChina, which supplies about 80% of the world’s PV
modules, is hindering solar projects, whereas windprojects have suffered less because supply chains are
more geographically diverse.
Local supply chains have also been damaged by
Covid-19. Hydropower projects that rely on local
suppliers for the vast quantities of concrete and othermaterials during construction have been unable to keep
up with demand due to production being suspended,
staff shortages and restrictions on movement.
In many countries, construction continues, withcontractors following public health guidelines – such

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as social distancing and self-isolation – but progress isinevitably slower.
Our own work has also been affected. In
response, we have quickly transferred from on-site toremote monitoring of construction sites. We now
review video footage sent from site, request shots ofspecific work areas based on ongoing activities andinterview site staff remotely.
The most severe impacts have been on projects atthe commissioning stage. International travel
restrictions, which were imposed by many governments
during a single weekend in mid-March, has made it
almost impossible for specialist overseas engineers totravel to a site, while many of those already on site
returned to their home countries. Even where travel
remains possible, accommodation is often hard to find.
But the sector is increasingly finding solutions
to problems that seemed insurmountable just a few
weeks ago. These include using local staff equippedwith mobile video cameras, finding alternativeequipment suppliers, sharing resources between
projects in the same country, identifying andimplementing temporary solutions, and taking
advantage of targeted exemptions from travel
restrictions from governments keen to provide support
where practicable.

Operational phase
We have seen little effect on operations so far, though
any reduction in demand for energy from customers
may result in output being temporarily lowered.
Most modern power projects require limited
human intervention to keep equipment running, atleast in the short term. This is particularly true ofwind and solar PV projects. In conventional power
plants, social distancing measures have been
implemented by splitting teams into small groups
and restricting access to control rooms and otherareas where operators normally gather.
Where possible, inspections and maintenanceare continuing but non-essential works, particularly
those relying on specialist engineers from overseas,
have been postponed. Projects with high levels ofredundancy and stocks of strategic spare parts arelikely to cope better in the medium term.

Flexibility and resilience: An exit
strategy
As governments plan to end lockdowns, scientists
warn of the risks of a second peak and the need tomaintain significant social distancing measures until
vaccination programmes can be rolled out. How canpower projects survive in this ‘new normal’?
・ Flexibility is needed to progress projects. Relianceon one-size-fits-all solutions or just-in-time
philosophies may not be as effective as they werein the past. One positive outcome of this crisis may
be that a range of new responses are being
developed to the challenges the industry face.
・ Build resilience into projects to help mitigate theworst impacts. This may mean designing a projectwith additional redundancy, agreeing support
packages with equipment suppliers or increase
stocks of critical spare parts where they cannot besourced locally.
・ Owners may need to take a proactive andcollaborative approach with contractors andsuppliers to protect projects. Measures could
include: Amending construction programmes,
implementing extra shifts (where permitted byauthorities) to lessen the impact of delays, making
bespoke changes to contracts or reschedulingmilestone payments.
・ The importance of due diligence will increase.
Questions that may need answering include: Can
key equipment be supplied from more than one
country? Are there specialist engineers based incountry? Do construction programmes consider
impromptu travel restrictions? What risk is theowner left holding?
・ There is merit in acting fast. When key restrictions
are lifted, there could be a huge surge in demand
as multiple projects clamour for the same resourcesat the same time. Early planning is therefore
crucial.
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