The Covid-19 was first identified in China’s Hubei province on 31 December 2019 and has gradually become a global health threat, impacting 140 countries and compelling the World Health Organisation (WHO) to declare it a global pandemic. Given that one-third of the world’s population is under strict restrictions of mobility, there are many industries that would be taking a hit. The power industry is among the sectors affected.

The coal sector is likely to take the major brunt of the pandemic outbreak since electricity demand decreases due to production halts in the major factories and industrial units across the globe. Under construction and planned coal projects are expected to face challenges in obtaining new project approvals and delays in the ongoing ones.

Energy and Power industry in the wake of COVID-19

Other sources, including the Washington-based Nuclear Energy Institute (NEI), believe that the nuclear industry will be fundamental to minimising the pandemic’s effects on energy supply.

Due to lower electricity demand and cheaper electricity prices, the gas-based generation is to be impacted as most gas energy generators are set to take a hit in their revenues in 2020.

In the renewable energy sector, there are major concerns revolving around the global supply chains. China, which was the first country to face factory closures, has started production at its facilities, though not at full capacity. The global solar and wind industries are already witnessing logistical slowdowns. The pandemic is expected to delay project development and would impact renewable auctions. The most significant near-term impacts on renewable plants that are already contracted or under construction may be felt through supply chains.

In the crude oil segment, prices have seen a drastic decline since 2019, decreasing by more than 60 per cent. The oil price collapse has also affected the natural gas prices by one-third compared to the levels a year ago. The effects of lower oil and gas prices on renewable energy sources will be somewhat unclear and complex and will probably differ substantially by market and region. Countries, where policies do not effectively mandate renewable energy, can continue to use oil and gas generation, which will be the cheaper option. However, emerging countries, which are sensitive to energy cost, are likely to opt for cheaper fossil fuels compared to renewables.

At the time of the existing scenario of Covid-19 outbreak and low fossil prices, there have been predictions that the utilities globally will not deviate from their long-term de-carbonisation and sustainable development goals.

Stimulus and recovery packages are important measures to accelerate the shift to sustainable, decarbonised economies and resilient inclusive societies. A comprehensive design approach is needed to secure political buy-in, business support and social acceptance in the aftermath of the pandemic. As the current crisis makes clear, no country can no longer afford to make policy decisions and investments in isolation amid elaborately intertwined social, economic and environmental challenges.