World Energy Council Head Talked About Crisis Consequences for Energy Industry
Angela Wilkinson, World Energy Council Secretary General & CEO described both current and long-term consequences of the crisis for energy systems and spoke about prerequisites for switching to new energy sources based on the results of the Council’s research project.
As COVID-19 continues to spread and the impacts cascade from society to the economy, anxiety about uncertainty creates fear of the future. It is important, however, to look beyond the immediate urgency and evaluate the ongoing implications of the crisis to avoid either black and white thinking or rose-tinted glasses. The future is not going to be all doom and gloom, and realistic hope is an action plan!
To help our members better manage the crisis today and navigate an uncertain future we are building a set of medium-term, post-crisis scenarios. We are not trying to predict what will happen or decide what should happen next. Instead we are aiming to equip our global community network with a set of plausible and alternative stories of futures that might occur, and to use them to address a big leadership question: How can we emerge from the COVID-19 shock as a more resilient society and continue to accelerate a successful global energy transition?
In developing these scenarios we have taken a deep dive into the immediate and longer-term implications of the crisis on energy systems and energy transition, as reported by respondents around the glove. I am delighted to share our work-in-progress in that important area, detailed below. Read also our preliminary findings from the first of our COVID-19 surveys, covering business impact and continuity planning, and stay tuned next week for our initial report on Critical Uncertainties and Plausible Post-Crisis Scenarios.
COVID-19 Implications for Energy Systems and Energy Transition
Based on initial responses to our global survey, most respondents do not expect to get back to normal quickly following peak disruption. An average of 44% across all regions expect it will take as much as 6 months for a return to normalcy, and 27% expect more than a year. Furthermore, a number of respondents in Latin America and the Caribbean/LAC (25%), Africa (19%) and Europe (15%) expect that there won’t be a return to business as usual, but rather regions will need to adapt to a ‘new normal’.
Across all regions, top long term (> 1 year) impacts to the energy system are seen to be changes in electricity demand patterns - increases in residential electricity use, decreases in industrial use and lower daily demand loads – as well as attention to long term and flexible storage solutions to ensure hourly- seasonal- and long-term reliability of energy supply. Changes to the supply mix are expected, including a decrease of coal and oil consumption, an impact on gas take-or-pay contracts and supply chain disruptions as well as delays of renewable plant construction projects. An increase in cyber threats is also expected, driven by accelerating use of digital space and working-from-home scenarios.
Regionally, increased investment in clean technologies and vectors is expected only in LAC and Africa and respondents in Europe and Asia in contrast see a decline in investments. Respondents from Africa indicate the COVID-19 crisis will ultimately have a negative impact on the reliability and equity of energy supply as well as a decrease in end-use efficiency.
Long term environmental and wider sustainability implications have also been raised. As the crisis impacts all activities, it is expected there will be benefits across all regions in the form of reduced pollution and mass consumption. There are, however, split views on the outlook for decarbonisation of energy systems within regions and between regions. Some respondents anticipate potential delay as governments respond to pressures to restart growth by rolling back action on climate goals. Others anticipate that the crisis will accelerate decarbonisation as governments increase direct investment to energy systems.
Angela Wilkinson, World Energy Council Secretary General & CEO also added: «Examining and understanding the early signals of change can help us to predict which future direction is emerging. We don’t know what will happen next, but we can equip our community with the best possible tools to emerge from the COVID-19 shock as a more resilient society and continue to accelerate a successful global energy transition».
The full text is available for download from the World Energy Council website. The business programme of the World Energy Congress in St. Petersburg in 2022 will include such topics as acting in unstable economic environment, strategies to transform operations, the future of the energy industry, and others. The Congress will be organized by the World Energy Council, the Russian National Committee of the World Energy Council, and the Roscongress Foundation.