Vestas, the world's leading supplier of wind turbines, canceled its 2020 financial guidance on Tuesday, saying the coronavirus pandemic is driving too much uncertainty to produce reliable numbers.

The first quarter of 2020 played out more or less to expectations, Vestas said, but beyond that, the Danish company cannot make useful forecasts.

“The situation changes daily, and my colleagues’ ability to adapt [rapidly] and follow our extensive safety measures [has] been key to keeping performance in the first quarter in line with expectations,” said Henrik Andersen, group president and CEO of Vestas. “Unfortunately, the pandemic continues to spread, and with no clear prognosis on when key wind markets such as the U.S., Brazil and India will recover, we are suspending our guidance due to the poor visibility for the remainder of the year."

Vestas said it will give updated guidance for the year only when it believes it can do so with some degree of certainty. The company's first-quarter financial results are due May 5.

Vestas took in 3.3 gigawatts of orders during Q1 and could potentially meet its financial targets for the period, the company said. Orders came from China, Sweden, Poland and the U.S., among other markets.

Fellow major European turbine supplier Siemens Gamesa has similarly been logging healthy orders in Q1, including 342 megawatts for a German offshore wind project. But both companies have been forced to shut down factories in China and Europe as a result of the novel coronavirus, including the temporary closure of Siemens Gamesa's giant offshore blade factory in Hull, U.K., while it put social distancing markers on the plant floor and adjusted shift patterns.

The union representing workers at the plant argued it should not have reopened while the rest of the country is in lockdown.

“We want to discuss with the company whether the production of blades is an ‘essential’ industry at this time. If it is not, we would want our members furloughed on full pay,” said Simon Coop, regional representative for the labor organization Unite.

Making up for wind's manufacturing shortfall

Turbine orders for projects being delivered in 2022 are one thing, but manufacturing and delivering existing orders right now is another.

Vestas said its manufacturing operations in China are now running as normal. The epicenter of the pandemic has shifted from China to Europe and the U.S.; Vestas said it can now offset some of the slowdown from production in Europe using its Chinese facilities.

Some factories in China could add more shifts, potentially even running 24/7, in order to make up for lost time. But there's a limit to how much downtime can easily be offset, said Shashi Barla, Wood Mackenzie’s principal analyst for wind technology and supply chain, in a research note published on April 7.

“The coronavirus has jeopardized approximately 10 to 15 percent of production volumes in China, Spain and Italy,” Barla wrote. “Just over $6 billion worth of turbines and component supply production is already jeopardized in Q1 2020. The coronavirus impact could worsen this if facilities continue to face delays in resuming production."

WoodMac lowered its 2020 global wind forecast by 4.9 gigawatts due to the pandemic.

There is better news for the wind manufacturing sector looking further into the future. Wood Mackenzie’s outlook for the turbine supply chain is a positive one in the long term. By 2028, the market for blades, towers, gearboxes and other components will be worth $67 billion. The primary drivers are higher average turbine prices and 20 percent growth in the offshore wind sector.

Murky short-term investment outlook

Even if the wind sector is able to offset the worst impacts of the coronavirus on manufacturing, there remain question marks over project financing. Vattenfall pulled out of this month’s Dutch offshore wind tender, saying it preferred to focus on its existing pipeline under the current circumstances.

Trade body WindEurope tracked €19 billion ($20.4 billion) of investment in new wind projects on the continent in 2019, according to its annual financing report released Tuesday.

Short-term forecasts are currently nearly impossible to generate. But, with wind a central part of the European Commission’s outline plan to be net-zero by 2050, there is cause for longer-term certainty to strengthen.

“We have yet to see the scale of COVID-19’s impact on wind energy investments,” said WindEurope CEO Giles Dickson. “But our message to investors and policymakers is clear: Renewable energies and the European Green Deal are the motors for Europe’s recovery. They create growth. They secure jobs. They’re key to our technological leadership towards a climate-neutral economy.”

The European Commission estimates 230 to 450 gigawatts of offshore wind will be needed to achieve carbon-neutrality.