The coronavirus has accelerated changes in energy supply and demand
(Eco Business, 29 Jun 2020) One of the immediate impacts of the coronavirus crisis was a fall in global energy use. While demand will likely rebound to previous levels, the overall energy mix is changing. Renewables are playing a bigger role as traditional sources such as coal become increasingly uneconomic. This trend was already in place when the pandemic hit, but is now proceeding at an accelerating pace.
The coronavirus pandemic has had an immediate impact on energy demand, energy security and renewable energy investment overall, and it has also accelerated some longer-term trends that already existed. Namely, the investment in renewables capacity and related technologies seems poised to slow but not stop. Moreover, power generation and energy consumption from fossil fuels appears ready to decline even more quickly. These developments are clearly positive for the fight against climate change.
The coronavirus has significantly slowed energy demand – for now
Much of the sudden impact of this virus on the energy sector is due to a reduction in demand. High unemployment, greater use of remote working arrangements, and social distancing immediately curtailed the amount of energy that society has been using. If social distancing continues in some respects and the overall economic recovery is slow, many experts believe demand will stay suppressed beyond 2020. It’s even possible that some of these trends in demand reduction – such as the shift to remote working – could be more structural, and perhaps even permanent.