Goverments in region to incentivize investments in renewables – PwC study on COVID-19



May 8, 2020






May 8, 2020





Governments in the region need to incentivize investments in renewables and reiterate the focus on sustainability, says PwC Croatia in a study called Impact of COVID-19 and Economic Downturn on South East Europe Power and Utility Sector.

According to the document, the power and utility (P&U) sector is facing disruption across the value chain. However, the impact of the crisis is so far moderate compared to other sectors.

PwC has suggested the necessary actions for states to stimulate green economy:

  • Allocate resources for the renewable energy sector or create renewable specific initiatives, as a part of the economic stimulus deployed globally for the COVID-19 crisis;
  • Enable companies to build resilience into energy value chain by creating cooperative models and drive digitisation initiatives through incentive schemes;
  • Incorporate risks from physical systemic economic shocks (e.g. climate change, pandemic, natural disasters) into energy infrastructure planning and renewables funding;
  • Incentivise renewables investments to meet green targets and provide long-term investment stability via effective subsidy or funding schemes;
  • Reiterate global focus on sustainability and collaborate on a national and international level to ensure concerted drive towards a greener economy.

Companies focused on stabilizing liquidity

Companies in the region are now primarily focused on stabilizing their liquidity, while major capital projects are continuing with minor delays, the study finds.

A separate analysis showed that the drop in the electricity bill collection rate ranged from 10% to 30% in most of the contracting parties of the Energy Community.

PwC study underlines that based on historical performance, SEE utilities might be less resilient to market shock than their European peers, with some companies more exposed to liquidity, cash flow, and debt financing challenges.

Total electricity demand in South East Europe (SEE) is down 20% since the crisis started and 10% from the same period last year. Spot prices on all SEE markets are highly volatile as they decreased by 46% from February to April.

Spot price on all SEE markets decreased by 46%

The rate of short-term economic recovery and the tourist season will be key factors in determining further demand development in 2020, the study reads.

Reassess conventional power plant portfolio

As SEE power and utilities are exiting the disruption phase, the first of the four phases of the crisis stage, the mindset needs to be shifted towards recovery and transformation. In the recovery phase, a key step is tracking financial impact and addressing it through a cost review.

After recovery, the utilities will experience stabilization – which is the mid-term phase, and resilience – long-term phase, according to the study.

During stabilization, accelerating growth initiatives is the most important.

Potential opportunities for investments will depend on the core capabilities of the company and individual strategic priorities, PwC said.

A key objective in the resilience phase is to transform the business model through innovation, digitisation and building integrated solution.

Comments (0)

Be the first one to comment on this article.

Enter Your Comment
Please wait... Please fill in the required fields. There seems to be an error, please refresh the page and try again. Your comment has been sent.

Related Articles

Slovenia prepares another capital injection for state-owned utility HSE

Slovenia prepares another capital injection for state-owned utility HSE

08 December 2022 - Slovenia is boosting the capital of its struggling power utility Holding Slovenske elektrarne with EUR 492 million

Budget Serbia 2023 energy sector guarantees

Serbia to support large-scale energy projects in 2023 with state guarantees for loans

07 December 2022 - The proposed 2023 Law on budget envisages state guarantees and project loans for financing several...

EU EUR 1 billion energy support package Western Balkans

EU launches EUR 1 billion energy support package for Western Balkans

07 December 2022 - The EU will back six renewable energy infrastructure projects in the Western Balkans with grants from a EUR 500 million package

roundtable solar locations mapping belgrade the nature conservancy

Mapping sustainable sites for 1 GW of solar power plants in Serbia

06 December 2022 - Sites for building solar power plants should be selected in line with sustainable development principles, according to experts working on the project Smart-from-the start planning for sustainable development - Mapping solar potentials