As Scatec Solar sees the COVID-19 pandemic not really impacting its current business activities so far, it has started feeling the heat of the outbreak on its under construction projects that look likely to suffer from travel restrictions and local regulations coming into place in various geographies. (Photo Credit: Scatec Solar)
- As a power producer supplying electricity to state-owned utilities, Scatec Solar says it is shielded from some of the negative effects of COVID-19
- Current risk of the virus on its operations is low, as per the management as the company hasn’t experienced any impact on its operating assets or on the delivery of power
- Company expects to reach its power production guidance for Q1/2020 while taking precautionary measures for its people to stay safe
- Travel and local regulations in various places may negatively impact the completion dates of some of its under-construction projects, it fears
So far, so good. That’s what Scatec Solar seems to be saying in its business operations update provided in the wake of coronavirus outbreak in a number of countries across the globe. Management considers the risk of COVID-19 on its operations ‘low’ and claims it has not experienced any impact of COVID-19 on its operating assets or on delivery of power to its customers.
It expects the production during Q1/2020 to be in line with the guidance provided previously. CEO Raymond Carlsen explained the reason behind this optimism, “As electricity production is a necessity in both normal and extraordinary times, we as a company is shielded from some of the negative effects many other businesses are facing.”
Scatec Solar sells power produced from its global portfolio of power plants to state owned utilities supported by government guarantees, under long term fixed price contracts. Over the next 20 years, it expects over NOK 60 billion ($5.75 billion) through long term contracted cash flows with the US dollar, Malaysian Ringgit (MYR), and South African Rand (ZAR) being predominant currencies.
Yet as travel constraints and local regulations come into effect in the wake of coronavirus outbreak, Scatec Solar accepts this has started impacting construction, commissioning and testing of some new solar plants. The Norwegian company is not sure how this will impact completion dates of its under-construction projects.
It adds, “Scatec Solar is closely monitoring developments and is following the respective national authorities advice and recommendations regarding the coronavirus disease (COVID-19). The Company is taking precautionary measures at all locations to limit the spread of the virus, keep people safe, and ensure continued stable operations of our power plants.”