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COVID Creates Challenges and Opportunities in Power Gen
If you were hoping for COVID-19 to disappear from the news by the school year, it’s obviously not going to happen. With major companies like Google announcing they won’t be sending employees back to their offices until the summer of 2021 and COVID metrics climbing again in the South and West, we probably will be working on the impact of the pandemic well into next year.
Tyler Wiegert It could almost be considered a truism to say that COVID-19 has been bad for business. The 33% annualized decline in GDP in Q2 2020 would apparently confirm that, and even the most positive about the economy must concede that a 9.5% single-quarter contraction is painful, to say the least. With businesses closed and housing starts in June lagging 4% behind last year, even with the brief reprieve when states began to reopen, the power generation segment has been hit hard by the pandemic.
Cummins, a giant in the industry, announced at the end of July that its revenues for Q2 2020 had fallen 38% from Q2 2019. That increased to 48% when looking at North America alone. Engine sales were down 47%, and power generation revenues declined by 37%. While Cummins was able to achieve positive net income because of a quick ramp-up in production in China after the worst of the virus had passed there, it was less than half of net income from Q2 2019.
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Trucking News: Asking The Expert
Do you expect a sharp slowdown for truck purchases in October due to the possible resurgence of the Coronavirus this fall?
Chris Fisher PSR Analysis: At this point, no. The “shock and awe” of the pandemic appears to be well behind us. During the past few months, commercial truck demand has stabilized albeit at a low level but continues to improve.
Recent surveys have indicated that trucking conditions are improving. The biggest threat to the health of the industry would be a further lockdown of the economy which would cause trucking conditions to slow but would not likely upend the market. However, we do believe it will take a further 18-36 months for the economy to return to a pre-virus level.
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PowerTracker™ Report Q2 2020: Coronavirus Generates its Own Demand
Looking by application, Portables and Standbys were slightly positive, while Temporary, Peak Shaving, Baseload, and Cogeneration were all negative by double digits compared to Q1 2020. This translated into a 5% increase in sales to Private consumers, and about 6% decreases in Institutional and Industrial sales.
On a Year-on-Year basis, overall unit sales for Q2 2020 were up 1% compared to sales levels in Q2 2019, with Q1 2020 having almost completely wiped out the gains earned in Q3 2020 of last year.
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PowerTALK™ News, August 2020
Download PDFThe August issue of PowerTALK™ News reports on moves by BP to fund EV development. It also contains items from Chris Fisher the senior commercial vehicle analyst at Power Systems Research. Here are the articles contained in this issue:
- NA: Gen-Set Opportunities
- NA: BP Moves on EV Program
- NA: B&S Files Chapter 11
- NA: Trucking News
- DataPoint: Off-Highway Trucks
- EU: Wacker Neuson Expands EVs
- BRAZIL: Higher Octane Gasoline Offered
- BRAZIL: PROCONVE P8 May Be Delayed
- CHINA: Record Sales for SGMW’s MINI EV
- TAIWAN: Audi Expands EV Charging
- JAPAN: Kubota Plans US Factory
- SOUTH KOREA: Doosan China Sales Climb
- SE ASIA: Used CE Prices Decline
- INDIA: EV Battery Program Launched
- RUSSIA: Mercedes Plans Plant
- RUSSIA: BMW Plant Scheduled
- RUSSIA: Amkodor Plant Started
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DATAPOINT: 2020 Production of NA Off-Highway Trucks Forecast at 1,200 Units
The 1,200 units is the estimate by Power Systems Research of the number of Off-Highway Trucks to be produced in North America (Canada and the U.S.) in 2020.
This information comes from industry interviews and from two proprietary databases maintained by Power Systems Research: EnginLink™ , which provides information on engines, and OE Link™, a database of equipment manufacturers.
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Taiwan Audi Teams with Noodoe To Create Pure Electric Living Space
To continue to promote the deployment of electric vehicles in Taiwan, Taiwan Audi officially entered the pure electric vehicle market at the end of 2019 and launched the “E-tron Future” reservation project.
Erik Martin To meet the pure electric future, Taiwan Audi has joined hands with strategic partner Noodoe to accelerate the deployment of Taiwan’s charging network. Evaluating home charging station installation and a cloud-based charging operating system paired with Taiwan Audi’s charging solution aims to realize a pure electric mobile life.
From north to south, Taiwan spans only about 500 kilometers. At the same time, the main population centers are concentrated in the seven largest metropolitan areas. These cities–while clearly defined–are connected by a comprehensive road network that provides excellent advantages in the development of electric vehicles.
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Russian Government To Pay 60% of Expenses for Switching Vehicles to NG
The Russian government subsidies now will cover 60% of individuals’ and small business’ expenses for switching vehicles from gasoline to NG fuel. That’s up from 30%.
Maxim Sakov The minister of Power Industry has offered to increase subsidies for switching vehicles belonging to individuals and small business two times – from 30% to 60%. Another 30% will be paid by Gazprom at the expenses of its marketing program. Therefore, vehicle owners should pay only 10% of the cost to switch.
The government will assign US$ 0.7 billion (50 billion Rubles) for development of the NG fuel industry during the period 2020-2024. This includes an annual assignment of 3.5 billion rubles for gas fuel stations and 0.7 billion rubles for fleet modification.
There are 484 gas stations in Russia (May 2020), 329 of them belong to Gazprom. In 2019, the fuel sales on gas stations increased 30%. Read The Article
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New Restrictions for Import of Right-Wheel Engines to Russia Launched
New restrictions for imports of right-wheel engines to Russia became effective July 1. Completely barred from import are machines of the M2 and M3 class – trucks, buses, LCVs and construction machines.
Maxim Sakov On top of this, the procedure of Custom’s clearance of right-wheel passenger cars became more complicated. The owner of such car should obtain technical certificate, confirming compliance of car design to the safety requirement.
According to the Federal Customs Service, the amount of payments will depend on ecological class, production date, engine volume and other parameters. This will include processing fee, custom’s tax and utilization fee. Read The Article
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Hyundai Plant Can Produce 300,000 Car Engines Annually
Hyundai VIA has begun construction on an auto engine plant near St. Petersburg.
Maxim Sakov The enterprise initially plans to make 240,000 engines per year. Then, the capacity will increase, and the plant will make 300,000 Gamma I engines of 1.6 liters.
The project has been established under a special investment contract. The investors “injected” US$185 million (13.1 billion Rubles) into the project. The plant will bring about 500 jobs to the city.
Test launch of the plant is planned in Q1 2021, and mass production is scheduled to start in October 2021. Read The Article
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Rural Economy Helping Ride Out COVID Impact
With extended lockdowns in most parts of India, the production of all non-essentials was at a halt or at minuscule levels in April and May until the economy was unlocked. This move reduced demand in the short-term, but owing to intrinsic domestic demand, we are optimistic about future business expectations
Aditya Kondejkar Better Outlook of Rural Economy
However, hope has arisen from India’s rural part as the agriculture sector appears to have been relatively less impacted by the lockdown. This part of the country never truly went into a harsh lockdown, and thus procurement, harvest, and consumer activities have remained unaffected. Farming continued during the lockdown, especially for rice and wheat cultivation. The return of migrant workers caused a surplus of agricultural labor. This resulted in the fact – more land was brought under cultivation than ever before. As a result, the country has witnessed a good season of rabi harvest.
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