Energy opportunities post-COVID – Is this the tipping point towards Green?
2020 has brought around the most prolific global economic challenge since World War II. The industry itself has been shaken to its foundation by the Covid-19 pandemic, and as we gradually recover we need to consider the bounce-back viability for industries that were once pillars of global infrastructure.
The gas and oil industry was hit with devastating force as consumption and demand plummeted during lockdown conditions – transport and logistics were reduced to minimal capacity and businesses closed their doors. Though we are entering a tenuous period of exploration into the new normal, the challenges faced by the energy industry (oil in particular) remain steadfast. Though vehicles are starting to return to roads (albeit for shorter journeys), it will be many months – if ever – that airline fuel consumption will return to sustainable levels. This, coupled with the abundance of opportunities that Governments have to create jobs within renewable energy may mean that oil never has the chance to bounce back to full fruition.
Demand for oil is now showing signs of a slow and gradual rebound – consumption levels seem to have bottomed out in April. But the journey back is not set to be an easy one, especially with growing pressure from a global population with ideals of becoming more sustainable and responsible for their carbon footprint.
Before the COVID pandemic, the pressure was on Governments around the world to implement new measures to protect the climate – the past few months may have made the process a little easier. Many businesses have further recognized that working from home is a viable option for their employee base, for those facing long commutes to the office provision of working from home a couple of days each week is now unquestionable. Recent surveys have also shown that rather than risking infection on public transport more employees are choosing to walk or cycle to and from work, reducing the number of carbon-emitting vehicles on the road.
More impactful is the concept of “Building Back Better”, a catchphrase being used to encompass the notion of replacing old societal systems (such as those reliant on fossil fuels) with more sustainable options (i.e. renewables). Though the focus has understandably been on protecting the public, Governments have also been found themselves in a unique position of restarting industries and the economy from a standing position. The opportunity to establish more efficient, responsible working practices has never been so prevalent.
There’s no doubt that Governmental response will differ per country; the US and China, for example, will likely maintain their high level of dependence on fossil fuel moving forward. But other influential parties are embracing the opportunity for change. Frans Timmermans, vice president of the European Commission is quoted to have said that “not a single Euro should be spent propping up old, dirty industries”. Ultimately this means that opportunities within the renewable energy sector are set to increase dramatically. Projections show that more than half of the global electricity supply will be provided by renewables by 2050. To achieve this, the level of job creation within the sector will need to be substantial. So, though many job losses are predicted in the gas and oil sector – our vantage point shows a period of transition rather than a simple decline.
The world’s population still needs an energy supply; a job loss from one area of the sector would surely constitute a job creation in another?
If Governments take advantage of the opportunity at hand, we may find ourselves looking back in a few years, reflecting on a pandemic that although tragic, proved to be a definitive tipping point for the health of the climate and planet.
Do you work in the Energy sector? We’d like to hear your thoughts surrounding the future of energy supply. Where do you see the industry in 5 years? What do you think has been the biggest impact of the pandemic?