COVID-19 has brought the creation of green energy from fossil fuels to breaking points. Global energy demand dropped to record low levels due to lockdown in the entire country. The IEA has predicted that total energy demand decreased by 6 percent, and energy-based emissions will decrease by 8 percent for 2020. Oil demand is expected to drop 9 percent and coal for 8% year, while crude oil reaches record-low rates.
Previous green energy crises offer insight into what happens when the oil price drops and how the use of fossil fuels has consequently bounced. But this crisis is different since it is demand-led. The scale of the decrease in demand, the rate of change, and how widespread it’s been have generated a radical shift that appears to be more than a temporary short-term fall in demand for fossil fuels, especially in the power sector.
With the drop-in demand, renewable sources (mainly solar and wind ) saw their share in electricity substantially growth at record levels in several countries. In less than ten weeks, the USA increased its renewable energy intake by nearly 40 percent and India by 45 percent. Italy, Germany, and Spain set records into the grid for green energy integration.
This Rise In Renewable Energy Isn’t Circumstantial
Although the pandemic is unexpected and circumstantial, the outcome for the energy sector isn’t. The ongoing increase in renewable energy to the grid results from a mixture of regulations, policies, incentives, and innovations embedded in the energy sectors of several forward-thinking countries.
These are three key factors behind the growth in renewable energy in this crisis:
- Renewables have been sustained by promising policies. In most countries, renewables receive priority through market regulation. The priority for the first batch of electricity into the network is given to the more affordable supply, favoring cleaner and cheaper resources.
- Continuous innovation. Renewable energy is now the most economical source of energy. IRENA recently reported that the price of solar had dropped by 82% over the last ten years, while BNEF says that renewable energy is currently the cheapest energy source in two-thirds of the planet.
- Preferred investment. Renewable energy is now the investors’ preferred option for fresh power plants. For about two decades, renewable energy capacity has improved steadily, and now 72 percent of new electricity capacity is a renewable plant.
During the COVID-19 pandemic, governments adopted full-lockdown actions that reduced electricity trade at historical levels (15%-30%) in several countries and generated an oversupply of available power capability. As the crisis hit, grid professionals sought the cheapest (and cleanest) source to balance the decreased demand. Weaker electricity demand raised the share of renewables in the system while sending the more polluting and expensive carbon fuels to the back of the line. This effect happened even in a time of low fuel prices, making carbon the biggest loser in the pandemic.
In just a few months, fossil fuels for power generation have reached a bad breaking point, as the power mix moved towards renewables in all major regions.
The interplay of market conditions and technology development, regulations during COVID-19 has triggered a much paradigm change for the power industry. Softer lockdown steps have shown that the recovery of demand, but the longer-term impact of this crisis is yet to be seen.
Breaking Records Without Outages From The Energy Sector
These are some first insights into the effects of lockdowns on power requirement:
1. The work-from-home economy has shifted peak demand.
As numerous people stayed at home, the changes in patterns modified the intensity of peak times. A flatter peak time curve indicates that there was less demand for storage and backup.
2. Many countries listed new records for clean energy generation.
As per EIA, renewable consumption in the United States has passed coal for the first time in 130 years, while the UK made a record for solar production in April. Other countries, such as Spain and Italy, in Europe, also have set records.
3. The Pace of this transition could be fast-tracked.
The complete substitution of new sources for fossil fuels has happened in less than three months without undermining the security of supply.
4. Challenges can be brought by share of renewables.
As with peak power demand conditions, a basic lower demand with a higher and sudden proportion of variable renewable energy may stress the grid system’s working. The condition of the network and grid infrastructure concerns, as a more resilient, dynamic, and smarter grid allows for fewer bottlenecks and more interconnected plants.
Not all countries are prepared for a greater variable renewable energy alliance, as the World Economic Forum’s Energy Transition Index 2020 has reported. Developing countries are much down the ranking list.
Government And Companies Can Initiate A Greener Post-COVID Comeback
As industry, businesses, and families focus on restarting their operations, the lockdown gives a sense of opportunity for the energy industry. It brings tons of lessons about energy policy, changes in demand patterns, and know-how for a greener grid without undermining the safety of supply. Additionally, it opens opportunities for innovation and investment.
Yet, According to BNEF, the vast majority of the COVID-19 relief from authorities so far will support carbon-intensive businesses – around $509 billion – without asking for improvements. A good example is the $123 billion bailouts to airlines with no requirements on carbon reductions attached.
Investors and businesses can play a part in fostering clean investment by multiplying the opportunities of energy markets and supporting low-carbon supply chains. Imperial College reported that this month, renewable energy stocks offer investors higher overall returns relative to fossil fuels and lower annualized volatility.
As Governments start to shape new regulations and support companies for the post-COVID-19 world, their focus should be on:
- Take inventory from the lockdown and promote green conditions to sustain and effectively manage a higher share of renewables.
- Redirecting investment and raising innovation in blockchain, storage, batteries, digital markets, and smarter grids.
Impact of The Covid-19 Outbreak On Clean Energy Progress
The Covid-19 Pandemic is threatening to impede the growth of key clean energy technologies, controlling investments, and is having a significant effect on power systems around the world.
Before the crisis, the progress on clean energy technologies had been promising but irregular. The IEA’s yearly Tracking Clean Energy Progress report indicates that only 6 out of 46 technologies and industries have been “on track” to meet long-term sustainability targets in 2019. Those six comprised lighting, railroad transportation, and vehicles. Another 24 showed some progress, but insufficient to achieve long-term objectives, while the remaining 16 were “off track.”
Global carbon emissions will fall this year due to the major disruptions to travel, trade, and economic activity brought about by the pandemic. As it comes on the back of widespread trauma and a worldwide health crisis, there is no reason to celebrate. What happens next is vital for our future. Achieving a strong economic recovery without the same type of rebound in emanations that followed the 2008 global financial crisis will need authorities to take charge of pursuing structural reductions in emissions through sustained, smart, and ambitious policies to accelerate the development and installation of a complete range of clean energy options.
But the IEA is not providing timely information and identifying emerging trends, but we’re also developing options. The IEA has been at the front line of calling to ensure the once-in-a-generation stimulus packages they’ll draw up to revive their economies drive deployment and development of clean energy technologies. To help guide these tough decisions which will likely shape countries’ infrastructure for decades, we’ll shortly be issuing the World Energy Outlook Special Report on Sustainable Recovery.
This will give clear suggestions on how governments can put green energy and sustainability matters in the center of stimulation plans to create jobs and build a more modern, resilient and clean energy system. Recognizing the crucial importance of innovation to clean energy advancement, we’ll publish in early July on an Energy Technology Perspectives Special Report on Clean Energy Innovation will analyze the early-stage technology where investment now can do the most to reshape the future.
The IEA has made it clear that tackling the planet’s climate challenge and accelerating clean energy alterations requires a grand coalition encompassing everyone who’s genuinely committed to reducing emissions. This coalition should attract investors, businesses, span authorities, and civil society to discuss best practices and ideas and inspire them. To this end, the IEA Clean Energy Transitions Summit on 9 July will help authorities identify the best approaches for generating jobs, placing emissions into structural decline, and increasing energy industry resilience.
One report or summit won’t bring about the sustained acceleration in energy progress required to set the world on a sustainable path. Reaching a definitive summit in carbon emissions and the scaling up of a complete selection of clean energy technologies will require timely information, actionable analysis, and challenging, real-world options from governments, businesses, and customers — day in and day out — for many years to come. The IEA stays committed to doing our part to help form a safe and sustained energy future.
The Covid-19 pandemic has a significant impact on energy systems throughout the world, controlling investments, and frightening to reduce the expansion of key clean energy technologies.
Green Energy Will Be A Game Changer
COVID-19 has had a game-changing effect in speeding up the clean green energy transition in the electricity sector.
Businesses, governments, and households have ‘kept the lights on’ during the pandemic but with greener and cheaper energy. Increasing investment, conditioning COVID-19 relief to green recovery, infrastructure, and innovation opportunities in digital technologies and slow-carbon are inclined to keep the clean energy curve from flattening.