The COVID-19 pandemic caused the biggest decline in power demand since the Great Depression. The demand is expected to decline by 5% in 2020, according to the International Energy Agency (IEA). Although the sector is expected to take years for demand to return to normal, investment in renewable energy may pave the way for a robust economic recovery.
Verdict has conducted a poll to assess the importance of the power sector in post-COVID-19 economic recovery.
Analysis of the poll results shows that the power sector will play a very important role in the recovery, as voted by a majority 67% of the respondents.
While 18% respondents felt that the power sector will play an important role in economic recovery, 9% felt that it will be somewhat important and a minority 6% opined that the power sector will not play an important role in COVID-19 economic recovery.
The poll was answered by readers of Verdict community site Power Technology between 18 June and 22 July 2020.
Renewables to play an important role in post-COVID-19 economic recovery
Operators turned to cost-effective renewable sources to generate electricity during the low periods of demand during COVID-19. Investment in renewable energy can potentially help in stimulating economic activities amid the economic downturn as well as reaching climate goals, according to GlobalData.
The Levelized Cost of Electricity (LCOE) for renewables has declined over the years making them cheaper and providing an opportunity to increase investments in the sector. The LCOE of solar photovoltaic (PV), for example, declined by 86% in 2019, while that of onshore wind fell by 50%.
Governments should consider increasing investments in renewables in their recovery stimulus to boost renewable energy capacity while generating new jobs. An estimated 11 million people were employed in the renewables energy sector in 2018, which is projected to increase to 42 million by 2050, based on estimates by the International Renewable Energy Agency (IRENA).