COVID-19 will slow the global shift to renewable energy, but can’t stop it

By Peter Fox-Penner for The Conversation

Shutdown in Seattle to slow the spread of coronavirus empties the streets, March 26, 2020. Less economic activity means less revenue for utilities. AP Photo/Ted S. Warren

Falling energy demand

The most obvious result of these shocks is clear: Economic contractions reduce power demand, because every form of economic activity requires electricity, directly or indirectly. The 2008–9 recession reduced power demand in the United States by about 10 years’ worth of growth. Put another way, national utility sales did not exceed 2008 levels until 2018.

Clean energy has momentum

Countervailing factors will partly offset this decline, at least in wealthy countries. Many renewable plants are being installed for reasons other than demand growth, such as clean power targets in state laws and regulations, and are already under contract or construction.

U.S. electricity generation is shifting toward lower-carbon fuels, including natural gas and renewables, and away from coal. EIA

Defaulting to dirty fuels?

Since early 2019 crude oil prices have collapsed, declining almost 64%. As oil market guru Daniel Yergin recently observed, this drop is likely to be steep and prolonged:

Oil companies are bracing for a prolonged period of low prices.

Parts shortages

The most significant near-term impacts on renewable plants that are already contracted or under construction may be felt through supply chains. Renewable industry executives are anticipating delivery and construction slowdowns, either because nations shutter industries to slow the spread of coronavirus or because workers start getting sick.

Cutting-edge research and commentary out of Boston University, home to Nobel laureates, Pulitzer winners and Guggenheim Scholars. Find an expert: bu.edu/experts

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