Energy players were counting their blessings as Spain this week entered a 15-day state of emergency to halt the spread of the COVID-19 coronavirus disease.

Insiders said the sector was set to fare much better than others, such as travel or leisure, which are expected to see crippling losses from sweeping restrictions on movement rushed in as Spain experienced the second-fastest-growing COVID-19 caseload in the world.

As of Monday, March 16, Spain's COVID-19 cases had grown by 1,438 a day to 9,191, with 309 fatalities. The state of emergency, announced Saturday, March 14 and going into effect Monday, saw all the country’s citizens ordered to stay at home unless travel was essential, for instance, to buy food.

It was the second countrywide lockdown to be mandated in Europe, after Italy declared a similar quarantine on March 9.

Red Eléctrica de España (REE), Spain’s transmission system operator, said it had set up a third control center to add redundancy to the system during the coronavirus crisis.

Carlos García Buitrón, CEO and founder of the green power retailer Ecovatios, said he did not foresee electricity supply problems during the lockdown. “The government wants to make sure nobody is left without electricity under these circumstances,” he said.

At another clean energy retailer, Holaluz, Chief Legal Officer Daniel Pérez Rodríguez told GTM the electricity sector would be one of the least-affected by Spain’s stay-at-home rule. “Plants will continue operating as normal,” he said. “It’s a sector with a high level of virtual operations.”

Near-term decline in power demand?

The main concern for renewable energy plant owners and operators is that a reduction in electricity demand could hit profits. “It’s clear the big utilities won’t have problems, but some independents might suffer more at this point,” García Buitrón said.

REE figures cited by Spanish newspaper El Diario show electricity demand had already fallen 2.7 percent in 2019 compared to 2018, the first year-on-year drop since 2015.

For now, though, it is still too early to tell how much the decrease in commercial and industrial activity across the country might be offset by an increase in domestic energy consumption. Some large manufacturers have already scaled back operations.

On Friday, March 13, carmaker Seat announced it is closing the largest automotive manufacturing plant in Spain for up to five weeks, sending 10,500 workers home.

And turbine maker Siemens Gamesa was reported to have closed its San Fernando de Henares plant in Madrid after an employee tested positive for the coronavirus.

Another issue for renewable energy developers is how the lockdown might affect the progress of government auctions and procurement programs.

Spain’s government was planning a series of energy and climate-change-related actions within the first 100 days of its election in January, said Brian Gaylord, a Madrid-based principal analyst for Latin America and Southern Europe at Wood Mackenzie Power & Renewables.

That looks "increasingly difficult" to pull off now, Gaylord said.

The coronavirus pandemic could have an impact on renewables procurement, not just by halting administrative functions for weeks or possibly months but also by potentially dampening economic activity and electricity demand to a point where further capacity isn’t needed for a while.

Long-term upside for renewables

Despite this, said Gaylord, renewables have broad support in Spain, and any return to business-as-usual operations would likely see the resumption of procurement activities.

There is even a possibility that renewables investment might increase in the future if backers come to view the assets as a better bet than asset classes that are suffering badly in the current crisis.

Across Europe, the coronavirus outbreak is punishing sectors ranging from hospitality to travel and transport. A March 16 forecast by the market intelligence firm Capa said the crisis would lead to bankruptcy for “most airlines in the world” by the end of May this year.

It is these wider economic impacts that may turn out to be the biggest problem for renewables, not just in Spain.

One analysis of COVID-19 cases in Wuhan suggested that because of the time lag between infection and symptoms, Spain may have had more than 20,000 people infected with the coronavirus before the government decided to clamp down on the movements of citizens.

If this factor-of-10 difference between infections and declared cases holds true for other countries, then many nations could soon be following Spain and Italy into a protracted lockdown — with unforeseen consequences for the global economy.