Energy storage deals with impacts from COVID-19

A quarter of energy storage companies expect to reduce their workforces due to the impact of the COVID-19 pandemic, while more than half are anticipating a loss in revenues, according to a new survey from the U.S. Energy Storage Association.

The ESA study queried 101 representatives from the sector. Most of the companies plan and hope to retain their employees while waiting out the virus which has killed more than 22,000 Americans so far this year, but they also confirm that the resulting work stoppage will cut into revenues and projects.

Sixty-three percent of the ESA survey respondents said they expected a decrease in revenues. A third went as far as to predict it would be a 20-percent drop or deeper.

Three-fourths of those energy storage respondents did not expect to reduce employment, but most of the rest admitted that reductions of up to 20 percent were possible.

“The COVID-19 pandemic has impacted the energy storage industry tremendously. While we still anticipate year-over-year growth, it is clear our industry is suffering with immediate and significant risks of workforce reductions and economic damage,” remarked Kelly Speakes-Backman, CEO of ESA. “These delays upend grid reliability and resilience efforts, just as we enter fire and hurricane season, and as states, towns, and utilities are beginning to incorporate energy storage systems as backup power to prevent power system disruptions for critical healthcare facilities. As such, ESA is actively seeking immediate relief from Congress and the Administration to relieve the financial stresses on our members and the industry, which represents more than 60,000 people, caused by the virus.”    

Earlier this week, Chris Ruckman, energy storage director with EPC firm Burns & McDonnell, contributed a blog focused on the pandemic’s impact to the sector. He cautioned that while projects should eventually move forward, project leaders will inevitably endure shipping delays and supply line disruptions.

Some manufacturers, for example, have shifted from making batteries to producing face masks and disinfectant bottles in the near term, Ruckman noted. It will be a while to reconfigure those production lines.

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Domestically, “We might expect state and federal government legislative processes will be diverted away from clean energy to deal with more pressing economic issues,” he wrote. “It is also likely that the economic slowdown will affect rooftop and other solar installation and electric vehicle adoption. It is entirely possible that a reduction in lithium-ion battery demand in 2020 could balance the reduction in supply. Market volatility may also affect investors and their ability to raise equity.”

Do not give up hope, industry observers such Ruckman and ESA point out. Supply line diversification and success in combating the virus outbreak in other Asian nations could help in spurring an eventual rally.

And, on a less specific but perhaps more human level, many believe that this, too, will pass. Human ingenuity will overcome the coronavirus with research and investment of both time and money. We will because we must.

In the meantime, energy storage is one of many sectors which will struggle through an uncertain time.

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POWERGEN International will feature Energy Storage Breakthroughs in its conference workshops happening December 8-10 in Orlando, Florida. Both the Energy Storage Association and Burns & McDonnell will be part of POWERGEN 2020.

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Rod Walton is Content Director for POWERGEN International and Power Engineering.

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