All economic activities were adversely affected by the implementation of measures to tackle the Covid-19 pandemic. The same was the case with the energy sector, which has experienced drastically reduced demand, increasing the feeling of uncertainty among shareholders and investors in such companies-energy producers.
According to data from the organization International Energy Agency (www.iea.org) during the financial lockdown the demand for electricity decreased significantly. Please see the Graph entitled: Changes in electricity demand: before, during and after lockdown measures in selected countries, weather corrected, 2020 compared to 2019, www.iea.org/reports/covid-19-impact-on-electricity. In countries such as the UK the decline in demand reached up to 25%, while in EU member countries it reached up to 15% (Germany) and 20% (France).
by Trust Economics- https://trusteconomics.eu
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In addition to this decrease in demand, prices for energy products and CO2 emissions have also decreased. Participating companies in the oil market, due to the great uncertainty in movements (from air, and sea) and transport (logistics) as well as the gradual implementation of policies in favour of environmental protection and climate protection maintain a defensive posture by maintaining cash reserves, reducing operating costs and postponing investment projects.
At the same time, the policies of many countries to switch them to Renewable Energy Sources (RES) increased the share of RES in the composition of electricity generation to a significant extent, achieving objectives of previous years.
However, the electricity sector also, through its RES production, presents, in addition to reducing demand, another equally important challenge called the degree of difficulty in programming it.
Electricity system operators must balance demand with real-time electricity generation in such a way as to guarantee the stability of the system’s supply at every level of electricity demand.
The fact that lignite and/or nuclear power plants are constantly being removed from electricity systems respectively, replacing them with RES plants in the power mix, increases the challenge of managers due to the limited flexibility presented by RES.
The good performance of electricity systems does not put off the need for highly flexible and time-resistant energy systems during the energy transition.
The challenge is made even greater by the fact that electricity produced by RES cannot be stored for more than 24 hours. For this reason, and until batteries are found that store electricity for a long time in giant sizes, other environmentally friendly types of energy production such as the use of hydrogen should be turned.
At the same time, both electricity system operators and its producers and their counterparts in the regulatory sector should check the results of various scenarios in terms of their response to different levels of demand, while operational continuity plans should be implemented at regular intervals and should always be reviewed in terms of time moving today.
In addition, electricity producers (companies) and not only they should invest in new digital technologies and applications that utilize all information in Manufacturing real time to make the best use of any manufacturing execution systems, use of cloud computing, energy analytics and Internet of Things.
The fact that the post-Covid-19 era characterizes the energy sector by uncertainty and reduced demand increases the degree of challenge of decisions to invest in new technologies.
The EU’s budget support packages, which will require at least 30% of them to finance projects leading to the green transition of the economy, will determine whether the fall in CO2 emissions for 2020 and globally (IEA) will constitute a new beginning of a steady decline in CO2 emissions or a random variable in the upward trend in CO2.
