How much has the UK’s energy market changed over the past decade?
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At the height of the pandemic and resulting lockdown, carbon emissions dropped sharply and the use of fossil fuels collapsed. The International Energy Agency labelled lockdown as a “once-in-a-century-crisis”, highlighting impacts upon the Energy sectors’ commercial demand as ‘monumental’. Transportation, roads, air travel, construction and production energy requirements were seen to plunge.
Business consumers significantly reduced their spending in the Energy sector, leaving demands for oil, electricity and coal at its lowest levels for decades. Energy consumption across Europe reduced by 15% and the public were seen to show greater enthusiasm towards initiatives to rebalance consumption from carbon fuels to alternative forms of energy production by turning ‘Green’.
But are such changes irreversible?
As businesses come back to life, the demands for energy return. However, due to an abundance of supplies resulting from months of weak commercial demand, prices remain relatively low and organisations are enjoying exceptionally low-cost energy.
To the contrary, Energy firms will presumably eventually cut production rates as a strategy to inflate prices and thus increase energy demands. When such cuts occur, there could well be a gap in the market for renewable energy companies to compete and to thrive. This is anticipated by some public officials and in some areas of the press with the hope that the impacts of coronavirus may spur a green recovery and shift the new power generation towards sustainable and climate friendly alternatives.
Governments across the globe have revealed their intentions to utilise the above impacts of COVID-19 to drive a “green shift”. Almost all EU nations back the green-coronavirus recovery and are now inclined to contribute to the EU’s blueprint to reach net zero emissions of greenhouses gases by 2050. With the UK leaving Europe it is still likely that we will adhere to these same targets and green ambitions. Despite America’s initiatives to drive up oil prices, US oil active rigs remain at a record low, operations have fallen by 56% and President Trump has shown little interest in bailing out fracking organisations directly.
The recovery plan is heavily reliant on the support of large energy corporations. Within the UK, large companies including Centrica, EDF Energy, E. On and National Grid are contributing and continuously adapting to the global imperative and consumer demand for renewable energy initiatives. Likewise, the construction sector are looking at large scale commercial building projects and considering the changes in patterns of working and reduced levels of commuting and thinking will there be the same demand or has COVID-19 changed the construction sector for good.
The demand for renewable energy and a “green shift” is in the interests of all of us to preserve the planet but will the impacts of COVID-19 be the ultimate pushing factor to a brave (and green) new world?
