The effects of COVID-19 have been far-reaching. Not only is the pandemic an unprecedented global health emergency, but it has also resulted in the worst economic catastrophe since the 1930s. Every part of the global economy has been affected, some more than others and millions of people have lost their jobs and find themselves without any form of income.
Effect of the Pandemic on the Energy Industry
In terms of the energy industry, parts have been harder hit than others. But what is particularly worrying are the predictions that there will be a reduction of at least 20% in global energy investment. Analyses by specialists in the field indicate that the total demand in primary energy is going to drop by about 6% during 2020. This is seven times greater than the drop experienced during the financial crisis that occurred during 2008 and 2009.
Of course, both fossil fuels and renewable electricity is affected, which means there are positives and negatives in the scenario.
The effects of pollution. Picture: Shutterstock
A significant positive is that the drop in demand across the board has led to a significant decrease in air pollution, particularly in cities. But, while we can rejoice that global carbon dioxide levels will be at their lowest since 2010, two realities need to be understood.
With this in mind, the International Energy Agency (IEA) has developed a sustainable recovery plan that addresses the core issues of the current global recession which has led to escalating unemployment worldwide. Key to the plan is the challenge to make energy systems cleaner and more secure.
Sustainable Recovery Report
The IEA’s Sustainable Recovery report, released shortly before the first international Clean Energy Transitions Summit that was held online on 9 July 2020, has been structured for implementation over three years from 2021 until the end of 2023. There are three primary goals: to create employment opportunities for millions of people worldwide, to boost global economies, which we all know are severely disrupted and negatively impacted by the coronavirus, and to accelerate global goals for a clean-energy future.
Current unemployment levels are reminiscent of those in the Great Depression of the 1930s. Picture: Shutterstock
The plan covers six key industry sectors: emerging and innovative low-carbon technologies, electricity, fuels of various kinds, transport, buildings, and industry as a whole. In keeping with its key targets, it considers national and international goals for future economic growth, secure employment for the future, and resilient development goals that are achievable and sustainable.
Recovery Plans Following COVID-19
While governments worldwide are already working on their individual plans for recovery from the chaos caused by the pandemic, not all have included energy as a factor. But the reality is that there are two major choices they can make when deciding on recovery plans, and they hinge on energy. Essentially, the choice is to:
Additionally, clean energy will help to create jobs and generate sustainable growth in the economy at a rate that is considerably higher than employment opportunities in the fossil fuel industry.
Unless we take action against climate change, it will continue to take its toll, playing a significant role in natural disasters. At the same time, millions of people die every year because of air pollution which can be limited by human action.
While it is true that renewable energy has had a higher price tag historically, the economics are changing rapidly and in most countries, solar energy now costs less per kilowatt-hour than coal-fired power. Fossil fuels, once the core of the global energy industry, are becoming risky business and demand is slowly decreasing.
While those involved with the construction, operation, and maintenance of buildings need to remain acutely aware of the need to accelerate clean energy transitions, including those that improve air quality and increase energy efficiency in residential, commercial, and industrial buildings, the IEA has focused on innovation technology as a key solution.
Three high-level discussions at the recent summit looked at the need to accelerate clean energy technology innovation, the need to ensure recovery is inclusive and equitable, protecting workers and developing new skills, and emphasized the importance of electricity in the transition to climate-neutral economies.
Ultimately, it was agreed that world leaders, governments, and role players in the energy sector have a historic opportunity to boost innovative energy strategies and improve the sustainability and resilience of energy systems using renewable options instead of fossil fuels.
There is a dire need for all countries to work together, or at least work towards the same goals, to beat COVID-19 and reach the 2030 and 2050 net-zero goals. Let’s do it!