It’s a known fact that the power sector is the backbone of the global economy as it provides the most essential resource – energy. During the last year when everything was paused for a while, the power sector continued to generate & provide electricity for medical services as well as household use & kept the world connected.
At first glance, it may seem like there hasn’t been any effect on the power sector as it didn’t pause & continued working. But when we dig deeper, we can see how excessively this sector has been affected by the pandemic. According to IEA, global electricity demand was 3.8% in the first quarter of 2020 as most countries had enforced lockdown by March. With passing time overall decrement in electricity for the year 2020 was 2%.
In response to the reduced demand, power generation was slowed down. The highest impact of the pandemic was on the global coal demand followed by oil & natural gas which was the least impacted. Because the usage of non-renewable resources for power generation had decreased, the power sector witnessed a lean towards renewable resources. As per a report by IEA, countries which were highly affected in the first phase of pandemic like Italy and Germany, electricity demand showed the first signs of recovering in April when restrictions were released. This pattern was then found in more countries like India, France, Spain & Great Britain, etc. as they started lifting restrictions slowly. By August, specifically, EU countries were a bit closer to their normal level of electricity demand. By mid-November global demand for electricity returned to its original levels as the industries started working again.
In the post-pandemic era, the power sector is witnessing the usage of a mix of renewable & non-renewable resources for power plant generator. The reason for this can be the eye-opening time the global economy faced due to the lockdown. Non-renewable resources need special curating & filtering to make them useful for electricity generation. In a lockdown, industries were closed, people were stuck in their homes & so, the industries working on the extraction of these resources were also slowed down due to a number of factors such as limited manpower & transportation.
On the other side, renewable resources such as solar energy, wind energy, hydro energy, geothermal energy, biomass energy were easily available. Further, they didn’t need many reformations to be used as a tool to generate power which made them preferred choices of many countries. By mid-November, in the United States & EU countries, the share of renewable resources was higher than in 2019. However, in India, coal-generated power was again in trend towards the end of November. As per IEA’s latest World Energy Outlook report 2020, Solar PV is more effective than coal and gas fired power energy in India.
Over all, 2020 brought a power shift in the global energy sector. Lockdown & other fuel transmission disruptions showed how important flexibility is. Global power sector thrives due to segmential generation happening in the countries. So in a way even the smallest shift in a country’s power dynamics can affect the power sector globally. Global flexibility needs are forecasted to double by 2040 as per IEA’s Stated Policies Scenario (STEPS).
Some of the companies in the power sector such as KEPCO, Engie, MD&A etc. have started working on the flexibility by focusing on renewable energy converters more. To sum it up, 2020 did see a notable decline in the energy generation & consumption graph. Still, being the engine of the global economy, the power sector strikes back sooner than other industries. Further it will not be a surprise if we see more usage of renewable resources in power generation. After all, it’s good for everyone globally.