Resilience in the COVID-19 Pandemic:
Resources for the Renewable Energy Sector
The COVID-19 pandemic turned the economy upside down, and the renewable energy sector is no exception. The REN21 community has been particularly active in providing information, analysis and responses. To help your work in these difficult times, you will find here a collection of resources centred around 4 themes.
Under each theme are different topics. Click on a topic and you will get a summary of what is happening. Want to read the original source? Use this spreadsheet to find the organisation’s name and links to all the material produced for that theme.
Besides written communication, you will find video messages and TV interviews. There are also surveys and factbooks. More resources include COVID portals, petitions and information packs.
Feel free to use these materials for your own purposes, but please remember to reference the original source.
I. Impact of COVID-19 on the energy sector
The demand for energy has fallen
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By: IEA, Carbon Brief, CEEW, Wood Mackenzie, RMI
- Global energy demand declined by 3.8% in the first quarter of 2020. (IEA)
- Electricity demand has been significantly reduced as a result of lockdown measures, with knock-on effects on the power mix. Electricity demand has been depressed by 20% or more during periods of full lockdown in several countries, as upticks for residential demand are far outweighed by reductions in commercial and industrial operations. (IEA)
- Electricity demand has fallen by 14%. (Carbon Brief)
- Surplus electricity in the grid can lead to curtailment of power from existing and upcoming RE power plants. (CEEW)
- Some new energy businesses are suffering in the downturn. Consumer-facing industries including electric vehicles and residential solar are seeing sharp declines. Slower growth in demand for power in and restricted access to credit in emerging economies could put a brake on investment in renewables. Renewable energy technologies that compete against hydrocarbons are under pressure from bargain basement oil and gas prices. Despite all that, though, renewable energy has been holding up reasonably well, and certainly better than oil, as well over half the world’s oil consumption is used in transport, which has been one of the sectors hit hardest in the downturn. Prices have also held up much better for electricity than for oil. That contrast was sharply demonstrated this week by the first quarter earnings from some of the oil majors and some leading power companies. (Wood Mackenzie)
- With potential long-term reductions in electricity demand, there will be an increased need to electrify the transport and space heating sectors to absorb spare renewable energy capacity on utility grids. Suddenly, the essential question before us is not when or whether to electrify everything, but rather, how to best integrate the new loads on the electricity grid—particularly the loads of electric vehicles and space heating—so that they act as flexible assets on the grid, and don’t increase peak demand, which is expensive to serve. Investments in charging infrastructure can also serve as stimulus programs for states trying to recover economically. This is particularly true for electrifying transportation, which can be done much more quickly and easily than retrofitting the built environment and all of its appliances. (Rocky Mountain Institute)
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There has been a significant drop in carbon emissions
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By: WRI, Carbon Brief, Energy Watch Group, RE100, UNEP, Wood Mackenzie, BEE
- CO2 emissions from the electricity sector are down by 39%. (Carbon Brief)
- We are currently seeing emissions fall, but such a temporary drop is irrelevant with respect to the monumental problem of climate change. (Energy Watch Group)
- Caution should be taken when commenting on the international decline in emissions from the stark drop in consumption and travel. We need a just transition, and that means not leaving people behind. Instead we should use this situation as a reminder. A reminder to be grateful; a reminder to be kind to colleagues, partners and strangers all over the world; a reminder that humans can be limitlessly innovative when required. The response to this international situation gives us hope for the climate, both in our ability to change and our ability to care. (RE100)
- COVID-19 is by no means a “silver lining” for the environment. Visible, positive impacts – whether through improved air quality or reduced greenhouse gas emissions – are but temporary, because they come on the back of tragic economic slowdown and human distress. (UNEP)
- While the short-term drop in emissions will be reversed in line with the recovery in economic activity, there have been some signs this week that the pandemic could accelerate the long-term transition towards lower-carbon energy. Royal Dutch Shell announced that it was cutting its quarterly dividend for the first time since World War II. But even as the company is taking these radical steps to strengthen its financial position, it is pledging to stay the course on cutting emissions. Like Shell, BP is sticking to its ambitions for cutting emissions and investing $500 million in low-carbon energy this year, even though it has cut its total planned capital spending by 25% to $12 billion. Bernard Looney, chief executive, said that in this “very brutal environment”, he was even more committed to the aim of reaching net zero emissions by 2050, in part because of the superior resilience of renewable energy. BP is sticking with its plan to invest about $500 million in low-carbon energy this year, although it has cut its total planned capital spending by 25% to $12 billion. (Wood Mackenzie)
- The short-term reductions in GHG emissions should not hide the fact that energy requirements will increase significantly in the medium and long term. In order to remain competitive on the one hand and to meet the climate targets on the other hand, industrial companies, the heat supply and the transport sector must be modernized in a climate-friendly manner and sector coupling must be promoted. Significantly more electricity is required in the future for the growing demand for climate-friendly heat pumps, electromobility and power-to-X applications. A sustainable and resilient energy system requires renewable energies in all their power and diversity, otherwise there will be a huge green electricity gap of 100 TWh in 2030. (BEE)
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There is now a larger share of renewables in the electricity mix
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By: Carbon Brief, IEA, Wood Mackenzie
- Countries have set new record-high shares for renewables in April and record lows for fossil fuel electricity generation. (Carbon Brief)
- Across the EU and UK, wind and solar reached a record-high share of 23% for the month of April, which offers insights into the road to zero-carbon electricity systems. (Carbon Brief)
- Renewables were the only source of energy that posted a growth in demand in the first quarter of 2020, driven by larger installed capacity and priority dispatch. Demand reductions have lifted the share of renewables in the electricity supply, as unlike coal, gas, and nuclear, their output is largely unaffected by demand. (IEA)
- The resilience of renewable energy in the coronavirus crisis was demonstrated impressively this week by Ørsted (the power company formerly known as Danish Oil & Natural Gas) who reported a 27% increase in profits from continuing operations in the first quarter, and confirmed it was still on course for a drop of only about 6% in its earnings. Iberdrola, the Spanish utility group that is active in renewable energy, also this week reported a 5% rise in first quarter adjusted net profit. Investor interest in power and renewable energy remains high, as can be seen from the close last month of BlackRock’s Global Energy and Power Infrastructure Fund III. It raised $5.1 billion, well above its original target of $3.5 billion. (Wood Mackenzie)
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Fossil fuels were already on the way out, and COVID-19 has accelerated this
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By: Carbon Tracker, ENEL Green Power, Centre for International Environmental Law, Energy and Climate Intelligence Unit, IEEFA, Wärtsilä Corporation, IEA, IRENA, 350.org
- Worldwide subsidies prop up coal power but 46% of plants will be unprofitable in 2020. Failure to remove these subsidies could mean locking in 499GW of high-cost coal power for decades. (Carbon Tracker, Centre for International Environmental Law)
- long-term systemic declines in the oil and gas industry had been accumulating long before the coronavirus pandemic emerged. Compounded by the impacts of the pandemic and related economic crisis, the industry’s collapse has accelerated, with leading companies losing an average of 45% of their value since the start of 2020. (Centre for International Environmental Law)
- Why would investors take an interest in renewable energy when the costs of – and therefore returns on offer from – oil and gas are skewed against clean alternatives? (Energy and Climate Intelligence Unit)
- COVID-19 may make 2020 a microcosm of thermal coal’s declining fortunes. Increasing competition from renewables as well as growing concerns about air pollution and carbon emissions, and the accelerating exit of global financial majors from funding new coal power developments are all taking its toll. Longer term, thermal coal exporters will see a permanent fall in demand as the energy transition towards renewables continues. (Institute for Energy Economics and Financial Analysis)
- Coal based power generation has fallen by over a quarter (25.5%) across the European Union (EU) and United Kingdom (UK) in the first three months of 2020, compared to 2019, as a result of the response to Covid-19, with renewable energy reaching a 43% share. It’s clear that the impact of the Covid-19 crisis has effectively accelerated the energy transition in the short-term, providing a unique opportunity to see how our energy systems can function well with far higher levels of renewables. (Wärtsilä Corporation)
- Coal demand was hit the hardest during the global reduction in energy demand, falling by almost 8% compared with the first quarter of 2019. Three reasons converged to explain this drop. China – a coal-based economy – was the country the hardest hit by Covid‑19 in the first quarter; cheap gas and continued growth in renewables elsewhere challenged coal; and mild weather also capped coal use. (IEA)
- Oil demand has also been hit strongly, down nearly 5% in the first quarter, mostly by curtailment in mobility and aviation, which account for nearly 60% of global oil demand. By the end of March, global road transport activity was almost 50% below the 2019 average and aviation 60% below. (IEA)
- The impact of the pandemic on gas demand was more moderate, at around 2%, as gas-based economies were not strongly affected in the first quarter of 2020. (IEA)
- Oil-price volatility produces contradictory effects. It undermines the viability of unconventional fossil fuels, such as shale oil – a notable competitor to renewable-based fuels that has arguably hindered the energy transition in recent years. This could encourage governments to shift their support more towards clean energy projects. At the same time, lower gasoline and diesel costs could dampen demand for electric vehicles. Oil remains the main source of transport fuel, which accounts for half of the world’s energy demand. Along with renewables and energy efficiency, the electrification of end uses like heat and transport, will be crucial to decarbonise overall energy use. (IRENA)
- If oil companies fail, a lot of banks and investors will go down with them. This is a stark warning to any investor who still thinks that they can profit from funding fossil fuel companies. (350.org)
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COVID-19 is disrupting renewable energy projects
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By: AMDA, ACORE, CEEW, ARE, GET.invest, GSC, GWEC, Iberdrola, IRENA, SEforAll, Wood Mackenzie, IIASA
- the potential delay to construction timetables undermines the ability of renewable energy developers to qualify for time-sensitive tax credits. (ACORE)
- timelines to implement new initiatives like certification of solar modules and inverters will now be extended. (CEEW)
- A situation like this can delay the issuance of new tenders. (CEEW)
- Need to fast track existing procurement and funding procedures for DRE projects. (ARE)
- A survey taken amongst businesses and project developers supported by GET.invest’s Finance Catalyst service shows that among the main challenges they were currently facing or expecting to face, clients mentioned decrease in revenue, shortage of working capital, HR concerns and supply chain suspension. (GET.invest)
- Solar companies are experiencing disruption to operations, reduction in orders and damage to investment climate. (Global Solar Council)
- At present, Europe, North America and India, the major manufacturing hubs for the global wind industry, are still in the middle of the crisis. Although most wind-related manufacturing remains in operation, the production at some turbine assemblies and component production facilities, for example in Spain, Italy, the UK and India, have been temporarily suspended to stem the spread of coronavirus. (GWEC)
- companies – especially those in the industries that drive the rest of the economy – must maintain and even accelerate planned investments in renewable energies, as this is the best way to support activity and employment among our thousands of suppliers, many of which are small and medium enterprises, and to bring about a faster recovery as soon as we overcome this situation. (Iberdrola)
- Governments should revisit deadlines for renewable energy projects that face contractual obligations for near-term delivery. (IRENA)
- There are concerns across the supply chain, in particular with higher than normal complexity associated with importing goods and clearing customs. (SEforAll)
- Supply chain disruptions and restrictions on construction work are slowing investment in wind power. (Wood MacKenzie)
- The challenge posed to the renewable energy sector to fill in the gap likely to be created by a reduction in fossil demand is that most of the supplies of solar panels and equipment comes from China and the sense of vulnerability from supply disruptions is acute. Additionally, is the continuing concern around stability of old-fashioned grid infrastructures. (International Institute for Applied Systems Analysis)
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More financial and technical assistance needed for Distributed Renewables for Energy Access companies
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By: ARE, GOGLA, Power for All, SEforAll
- We need to pool resources for a rural electrification stimulus plan and global DREA relief fund. (ARE)
- There could be an opportunity to tap into disaster relief grant funds for providing simple self-installed solar lighting and cell-phone charging kits. The essential service designation underscores how off-grid solar enables emergency preparedness and communication. (GOGLA)
- The COVID-19 pandemic threatens to reverse the enormous progress off-grid energy companies have made to bring power to 470 million people in the last decade. The new global economic crisis will make it more difficult for existing customers to pay for their energy services. At the same time, slowed supply chains and reduced investment flows are causing energy companies to run out of cash. Facing dwindling liquidity, these energy companies will be forced to lay off staff – putting the sector’s nearly 370,000 jobs at risk – and shut off customers’ access to energy. The COVID-19 Energy Access Relief Fund will bridge this funding gap to maintain the sector’s progress in bringing energy to all. (GOGLA)
- The decentralized renewable energy (DRE) sector’s response to COVID-19 falls into two main categories: 1) ensuring that companies and consumers emerge intact from the crisis, and 2) embedding DRE solutions, both immediately and longer term, into the nexus between “energy for all” (SDG7) and “healthcare for all” (SDG3). (Power for All)
- On average, off-grid companies expect to lose between 27% (SHS) and 40% (MG) of their revenues in the coming months. As expected, cash positions are extremely tight, with ~70% of off-grid operations having two months or less OPEX available (67% for MG; 75% for SHS operators). (SEforAll)
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Fossil fuel companies are taking advantage of the situation to look for bailouts and roll back environmental/climate regulation
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By: CAN international, Drilled News, Greenpeace, Clean Energy Wire, OECD, Clean Energy Wire, Fundación Energías Renovables, Influence Map, Oil Change International, 350.org, IEEFA
- The current economic difficulties should not in any way imply rescuing the usual stakeholders, such as fossil fuels, chemicals, the manufacture of polluting cars and airlines. (Fundación Energías Renovables)
- Climate-related deregulation appears to be the priority for oil and gas lobbyists, and has so far been detected from key industry associations and players in regions including the US, Canada and Australia. Lobbying on climate motivated policy strands so far has concentrated on delaying or freezing compliance to regulations currently in place. (Influence Map)
- It does not make sense to use the COVID-19 stimulus packages to try to revive a sunsetting industry which will not deliver on economic recovery, only to shut it down a few years later to meet climate goals. (Oil Change International)
- The fossil fuel lobby and other vested interests are quick and coordinated, and are trying to position themselves as the lynchpin of our economies and thus worthy of being saved. Instead, governments should be responding to the rights and needs of workers in the fossil fuel industry and related sectors who would be impacted by these industries collapsing. The decline of the fossil fuel industry should be accompanied by just transition policies. Banks can use the looming economic crisis as an opportunity to orient the market towards zero-carbon technologies. (350.org)
- The oil and gas sectors hold $744 billion in outstanding bonds and debt (out of the $7.9 trillion in total corporate debt) and has been the subject of special pleadings by the White House. Almost 83% of the industry’s debt could be eligible for refinancing under the federal program; a recent letter from several senators from oil-producing states asked that high-risk debt in the sector also be eligible for refinancing. Even the strongest parts of the industry, the oil majors, have not escaped fallout from the virus, a triggering event that has brought the last ten years of poor financial performance into stark relief. For most of the last decade, the industry was in last place in the stock market. The sector holds only 2.6% of the Standard & Poor’s Index, whereas it once dominated the market with 28% in the 1980s. ExxonMobil, the industry leader, was once worth $500 billion in market capitalization. The company hit a low of $139 billion on March 16, 2020. These facts have not quite penetrated the consciousness of the money managers, investment bankers and Washington policy makers who have continued until now to keep the sinking ship afloat. Direct cash to oil and gas companies may buy them some more time, but the time will be spent drilling more oil and gas for an oversupplied market that has not produced profits for most of the last ten years. Unlike restaurants and airlines, where there is a strong likelihood that a decent customer base awaits, the oil and gas sectors face an increasingly unstable future. (IEEFA)
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II. Opportunities for renewables
Now is the time to decarbonise our economies and transform our energy systems
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By: WRI, Carbon Brief, Energy Watch Group, GEF, Green Budget Germany, IHA, IIASA, Energy and Climate Intelligence Unit, UNIDO, WEF, IEEFA, RMI.
- The Covid-19 pandemic has unleashed humanity’s instinct to transform itself in the face of a universal threat and it can help us do the same to create a liveable planet for future generations. (Carbon Brief)
- The past few weeks have also shown something extremely encouraging: The world, when it comes together and seriously tackles a global threat, can achieve great things in little time. If we now manage to keep up the current level of commitment and this willingness to change our habits, and redirect our efforts and our determination to address the problem of climate change, then everything is possible. (Energy Watch Group)
- Faced with the coronavirus, the need to unite and protect our planet has never been greater. This is a pivotal year for the global environment. Decisions taken in 2020 will have far-ranging impacts for the decade ahead. As the world looks to re-open and rebuild economies and societies in the coming months, we will have an opportunity to transform the way we eat, move, produce, and consume in support of a more sustainable global economy. Doing so would give overdue credence to what scientists have been telling us about human pressures on nature’s systems. (Global Environment Facility)
- While we focus on health and short-term support for employees and companies, we must not repeat the mistakes of past economic crises and think of tomorrow in all our actions. (Green Budget Germany)
- The Covid-19 pandemic will reset our society and economy in ways we cannot yet imagine. When we recover from this crisis – and we will recover – we can expect to see significant new approaches to global governance, economic development, environmental and social sustainability and energy systems. There will be a rethink about our critical infrastructure and interconnections between countries. (International Hydropower Association)
- At the Placencia Ambition Forum and the Petersberg Climate Dialogue, held virtually as a result of COVID-19, ministers of nations from Britain to Belize have been declaring what needs to be done to ensure greater climate resilience. UN Secretary-General António Guterres outlined a six-point proposal for global economic rebuilding that would tackle the legacies of coronavirus, fossil fuel emissions, rampant land use expansion and isolationist politics. (Energy and Climate Intelligence Unit)
- While there are many unknowns when it comes to the current recession, we can draw lessons from stimulus responses of the past. In the wake of the Global Financial Crisis, economic recovery packages were implemented in numerous countries to stimulate green growth, create jobs and support low-carbon economies. China and South Korea quickly became the world leaders in green spending. While it wasn’t perfect, the American Recovery and Reinvestment Act of 2009 designated US$90 billion to promote clean energy. The historic US bill is often credited with the “explosion” of America’s clean energy economy, which created hundreds of thousands of new energy efficiency jobs and a platform for tech companies like Tesla to thrive. If there is a silver lining to be found in the global COVID-19 outbreak, it’s that we now have a global precedent for radical action in the face of an unprecedented crisis. The prioritisation of energy efficiency incentives and the renewable sector offers industry competitive solutions to reduce power bills, rapidly generate new jobs, curb carbon emissions and save money all at the same time. (UNIDO)
- There is an opportunity to reboot the system in a way to avoid returning to the past and invest in a recovery that accelerates the energy transition. A systemic approach to the transition requires simultaneous action on multiple solutions – including renewable energy, systemic efficiency, circularity of the economy, cutting emissions from fossil fuels and building human capital for the future energy system. As energy companies are revisiting their long-term investment strategies, prospects are open. Energy expenditures for the large energy-consuming countries have been significantly reduced due to the collapse in oil prices. For example, every $4 decrease in commodity prices leads to about $5 billion in import bill savings for India, which is the world’s third-largest energy consumer. Countries can now use these savings to be reinvested in a more diversified energy system. (World Economic Forum)
- The pandemic has forced a number of rapid innovations in the way the world goes about its business and life. These could have long-term impacts on energy demand, as most of these innovations have tried to find a substitute for commuting and the need for mobility – e.g educational institutions have risen to the challenge and placed a record number of their courses online; offices and non-customer facing businesses have encouraged work-from-home and are increasingly becoming confident of their ability to maintain efficiency and productivity using this means of business handling; conferences and workshops with fairly large number of participants have shifted to the use of online platforms and have been conducted successfully. (International Institute for Applied Systems Analysis)
- Where demand reduction/management and shared services prove inadequate, the role of renewable energy needs to be aggressively stepped up. Utility scale renewable energy sources, especially based on solar and wind energy, are increasingly price competitive at a grid level. A lot of this has been, and is expected to be, led by growth in the solar industry. (International Institute for Applied Systems Analysis)
- With the world now in economic lockdown and governments lavishing credit on all-comers with little restraint, it may seem a strange time to propose an additional tax for the crisis aftermath, across the global economy. But a carbon fee can help direct this wall of cash and credit along a more credible, safer path leading to a more stable climate, with a net benefit for citizens. First, a carbon fee is an economy-wide way to direct a vastly needed fiscal splurge into low-carbon, less-polluting industries. Second, a fee can bring more countries on the same page, to an urgent and systemic risk. Like the coronavirus, climate change is a global emergency. (IEEFA)
- In this and other crises, there is an interplay between different factors; in this case health, the economy and society. These factors all have the ability to compound each other, and the effects of that interplay drives exponential “stochastic” or unpredictable risk. Such risk is not measurable, and dynamics today produce results down the road so it’s very hard to measure or often even perceive causal relationships. The underlying structure of our political and economic systems create further challenges. These are designed to manage human interactions, not manage the human relationship with nature. The core challenge relates to addressing unmanaged externalities, of which carbon emissions are perhaps the most salient example, and which are now impacting us on a global level creating systemic risk. Our economic system does not effectively deal with externalities, and political systems have not effectively stepped in to manage these. Collective action across the financial sector can be a key force to push us toward a future that is both low-carbon and resilient. Already we’ve seen the effectiveness of collective financial sector action, through initiatives such as the Poseidon Principles—in which banks representing over a quarter of global shipping debt have agreed to help steer the shipping sector toward decarbonization—and through climate-related shareholder resolutions submitted to major fossil fuel companies. Climate alignment of portfolios can help to put the world on a path to lower emissions, while reducing risk for investors. (Rocky Mountain Institute)
- Fortunately, many of the solutions that help to mitigate climate change can also enhance resilience, in a way that enhances the effects of both. Whether we are talking about hurricane-proof solar-powered microgrids in the Caribbean or “green” recovery programs that put people back to work by weatherizing homes and building the transmission lines and EV charging networks that we need for a low-carbon future, mitigation and resilience can work well together. (Rocky Mountain Institute)
- The energy transition is not static, but evolving, and our understanding evolves with it. We know things today that we did not know 10 years ago, or in some cases even a few years ago. We know that the transition is happening, that it is inevitable, and that it is driven increasingly by the superior economics of energy efficiency, renewable energy and electrification. Technologies like LEDs, solar PV, wind turbines, and electric vehicles (EVs) aren’t just what we need to combat climate change: they are technically superior solutions to the older energy technologies they replace. Another thing that has become clear in recent years is that fossil fuel use is peaking. The peak of fossil use came in Europe in 2005, global coal use peaked in 2013, and petroleum use has already peaked in the developed world. However, there are still many things that we do not know, and many details that are clear. Crises like the recent COVID-19 pandemic further add to the uncertainty. This disaster has crushed fossil fuel demand, but also slowed the deployment of clean energy solutions that are needed to structurally replace oil and other fossil fuels. There are still questions about technology. While LEDs, solar, wind and lithium-ion batteries—inside or outside EVs—are firmly established at this point as essential technologies, the transition will require more technologies, some of which are still being developed and scaled. We simply don’t know which of these will win out and which will solve some of the thornier problems of this transition, like decarbonizing the last 20 percent of our electricity system. (Rocky Mountain Institute)
- Many of us who are fortunate enough to work from home are acknowledging the potential for “telecommuting,” as traffic volumes plummet in cities around the world and air quality improves dramatically. While there are some opportunities to reduce vehicle miles traveled via telework, they are limited by the number of jobs that require employees to be physically present, such as construction and hospitality, and the limited number of trips that commuting represents. Similarly, a strategy to reduce transportation sector emissions using electric vehicles (EVs) alone will not deliver the needed reductions in time. If we are to believe that telecommuting will take hold for many people, why not complement that initiative by taking away land from automobiles and giving that space to pedestrians and cyclists? In addition to reducing emissions, we should also consider the public health benefits of making active transportation (i.e., walking and biking) easier and more convenient in these times of social distancing and isolation. Despite the pressure this pandemic has put on public transit, it must and will remain a vital part of our cities. However, it must be given the spatial priority on our streets that it deserves. A bus that carries between 40 and 80 passengers during peak commute periods should not be stuck in general traffic behind single-passenger automobiles. It’s also time for cities and states to dispense with policies and complicated regulations that either outright prevent or make prohibitively difficult the development of anything other than single-family housing in the suburbs, which only incentives car ownership. Antiquated zoning and planning policies disconnect communities from economic opportunity, worsen public health, and drive up emissions through increased automobile usage. (Rocky Mountain Institute)
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COVID-19 shows us how vulnerable our economy is to global shocks, and exposes who is most vulnerable
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By: C40, IIED, UNIDO, WRI, Hivos, 350.org, RMI
- According to the IMF, global GDP is predicted to fall by 3% this year, more than 5 times the drop in GDP that occurred between 2008-2009. It is important that any economic response to the recession triggered by the recession does not exacerbate the climate crisis. The solutions to the economic crisis are the solutions to the climate crisis, and must be used to accelerate the transition needed to achieve our climate goals. (350.org)
- The likely halving of global economic growth is expected to trigger a worldwide recession. Africa’s annual growth is predicted to drop to 1.8% from a previous estimate of 3.2%. Together, the continent’s oil-dependent economies could lose up to US$65 billion of income. Falling oil prices, exacerbated by the pandemic, are already affecting exports: in early March, Angola and Nigeria were reporting that about 70% of their April-loading cargoes of crude oil were unsold (PDF). Both countries rely on oil revenues for close to 70% of their national budget. Trade forecasts for other hydrocarbon-sensitive economies such as Gabon, Equatorial Guinea, Algeria and Chad will be bleak. Absolute dependence on natural resources places these countries at the mercy of the world economy; when a pandemic-scale public health crisis hits, it means reduced foreign exchanges reserves, compromised social spending, and the derailing of hard-won sustainable development achievement. (International Institute for Environment and Development)
- During the Ebola outbreak in West Africa in 2014, more people died from the interruption of social services and economic breakdown than from the virus itself. This should not have happened, and the world cannot let it happen again. As the world enters the deepest global recession since the Great Depression, we need to connect health needs to social, economic and environmental well-being, linking the present to the future. (UNIDO)
- For poor countries and vulnerable populations, COVID-19 is a perfect storm. People living in poverty, in informal settlements, and slums, and uprooted by war and persecution already face multiple risks every day, including climate change. Now they face the health, economic, and livelihood impacts of this crisis. Meanwhile, climate change impacts add a threat multiplier: cyclones and hurricanes threaten island states in the Pacific, Indian Ocean, and Caribbean; droughts, insect outbreaks, and floods could destroy crops on a massive scale from Africa to Asia, hurting food security. (World Resources Institute)
- The pandemic resulting from the uncontrolled spread of COVID-19 has not only exacerbated inequalities and stressed the evidence that the current economic model is not sustainable, but also set before us the reality that most countries are not even equipped to cope with a health crisis. This is especially true for the 840 million people in the world who still do not have access to electricity, 573 million of them living in Sub-Saharan Africa, to whom are added a further 3 billion people who lack access to clean cooking solutions. Indeed, they rely on inefficient stoves and other polluting fuels, such as kerosene, biomass (wood, animal dung and crop waste) and coal for cooking purposes or heating their homes. (Hivos)
- Normal was already a crisis. We can’t go back; we need to rebuild and do it better. Addressing the health and economic crises requires fixing what’s broken in our climate, our labour markets, and our energy systems. The pandemic is making it more evident than ever that the climate crisis mirrors and is inextricably linked to inequality between social classes and countries. Global South countries are particularly vulnerable, as many face crippling debt and structural adjustment programmes that prevent them from making major public investments. Because of this, they are now less equipped to deal with the coronavirus crisis and less resilient in the face of climate impacts. Global North countries have a moral duty and to address these structural disadvantages in their response to the coronavirus crisis and looming economic recession. Just recovery means re-building and re-tooling our economy in a way that works for the many, not just the already wealthy few. (350.org)
- The recent coronavirus-induced oil price crash is bad news for Nigeria’s oil-dependent economy. With oil providing over 80% over exports and most of Nigeria’s foreign exchange earnings, and oil prices expected to remain low, forecasters at McKinsey and the World Bank predict that Nigeria’s GDP will contract by between 3 percent and 9 percent in 2020. Agriculture can contribute to economic diversification, which is much needed at the moment. Experts estimate that Nigeria’s agricultural sector, which provides 23 percent of the country’s GDP and employs two-thirds of the labour force, has the potential to generate $40 billion in exports. Despite electricity’s role in ensuring the smooth operation of agricultural value chains, only 36 percent of rural Nigerians, most of whom are farmers, have access to grid electricity. Distributed energy resources (DERs), including solar mini grids, can help to bridge the electricity access gap. DERs can also reduce the cost of electricity in rural areas and are poised to similarly catalyse cost savings and quality improvements in Nigerian agriculture. (Rocky Mountain Institute)
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The renewable energy community needs to come together during this time
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By: IRENA, Power for All, Acciona, ACORE, WEC, ARE, European Parliament, C40, RMI
- As the COVID-19 pandemic reaches most corners of the world, pulling together as a community of deep expertise has never been more important – to share experiences and lessons learned, and better prepare for and shape what comes next. Our role as a credible, responsible and impartial value-adding “global voice” for whole energy system movement has never been more critical. Examining and understanding the early signals of change can help us to predict which future direction is emerging. We don’t know what will happen next, but we can equip our community with the best possible tools to emerge from the COVID-19 shock as a more resilient society and continue to accelerate a successful global energy transition. (World Energy Council)
- 130 public, civil society & private sector partners are calling for significant investment in the DRE sector to ensure its survival & to lay foundations to achieve full energy access by 2030. (ARE)
- Acciona has joined initiatives such as Energía Positiva+ and Startup Olé to seek solutions to mitigate the impact of COVID-19 through collaborative innovation. (Acciona)
- 79 MEPs and over 50 leaders from banks & insurance companies joined the “alliance for a green recovery”, launched at the EU parliament. Signatories of the Alliance say they are committed to support post-pandemic “stimulus transformation plans” that put the fight against climate change and biodiversity loss at the centre of Europe’s economic policy. They are calling for a “worldwide alliance” of politicians, decision-makers, business leaders, trade unions, and civil society groups to support a green transition after the pandemic. (European Parliament)
- C40’s Global Mayors COVID-19 Recovery Task Force will establish a common framework that all of C40’s global membership can use to create a “new normal” for city economies; agree upon concrete measures they can put in place for recovery; how to communicate about the climate crisis in a post-COVID-19 world; and how can they influence stimulus packages and interventions to support the necessary transition to a more sustainable, low-carbon, inclusive and healthier economy for people and the planet. (C40)
- The best-case scenario for stopping COVID-19 and preventing the worst effects of climate change is to flatten the curves—both of new infections and atmospheric CO2 concentrations. Neither challenge has a simple solution, and decisions about investing limited time and resources require actionable data from a multitude of sources. A key early lesson for the climate fight is that we must more ambitiously connect data across diverse global systems to make the right investments and political decisions at the right time. However, international government-led action has been insufficient in coordinating timely interventions on climate change. In the absence of such leadership, networks of non-state actors (e.g., NGOs and corporations) may be better positioned to create borderless solutions to such global systems challenges. Coalitions of such actors have demonstrated the ability to create vital collaborations that engage industries, supply chains, and people to measure what matters. (Rocky Mountain Institute)
- On Wednesday May 6, the Energy Transitions Coalition – a coalition of 40 global businesses in the fields of energy and finance, including finance institutions and insurers such as HSBC and Allianz energy majors such as BP, Orsted, and Shell – released a statement that called on governments to support a massive wave of investments in renewable electricity and other low carbon energy solutions when devising recovery plans from the COVID-19 pandemic. https://www.euractiv.com/section/energy-environment/news/energy-firms-rally-behind-green-stimulus-call/
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III. Health benefits of a renewable-based economy
Tackling climate change and global health risks go hand in hand
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By: Climate and Clean Air Coalition, GEF, MECS, OECD, SCI, RMI
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- Warming of the planet is projected to promote the northward spread of vector-borne viral diseases like Zika, Chikengunya, and Lyme. Making clean energy, including clean cooking, affordable to the poorest three billion is as essential for our survival as it is to their survival. we should think about clean energy access in the same way that we think about vaccines – as a life-saving solution, not just a product. (Climate and Clean Air Coalition)
- Climate change is another destabilizing factor that is affecting the checks-and-balances of nature and raising these risks. (Global Environment Facility)
- We don’t yet know the implications of this for vulnerability to Covid-19 but one peer-reviewed study into another coronavirus outbreak – the 2003 SARS outbreak – showed that patients in regions with moderate air pollution levels were 84 percent more likely to die than those in regions with low air pollution. Whatever Covid-19 brings, what is clear is that access to modern energy, be it in the form of electricity for health centres or testing labs or cleaner forms of cooking, remains an absolute necessity. (Modern Energy Cooking Services)
- A cleaner environment will have a positive impact on human health; for example, reductions in air pollution will improve the health of vulnerable segments of urban populations and can make them more resilient to health risks. Governments need to communicate clearly on the benefits of improving the overall environmental health of societies. Underscoring the benefits to well-being and prosperity from more resilient societies can strengthen public support for measures aimed at enhancing environmental health. (OECD)
- Reports such as The New York Times article “New Research Links Air Pollution to Higher Coronavirus Death Rates” from 7 April 2020 suggest a correlation between levels of air pollution and deaths from complications due to COVID-19. This correlation is a concern to those in homes where cooking with combustible fuel leads to high levels of indoor air pollution. (Solar Cooking International)
- As a global pandemic shines a new light on health, air pollution, and the disproportionate impacts on vulnerable populations, it exposes the need to protect the public from risks both outside and inside the home. The health case for transitioning to all-electric cooking has been slowly mounting for more than forty years but policymakers must urgently address air pollution now. Homes with gas stoves have nitrogen dioxide concentrations 50 – 400% higher than homes with electric stoves. Exposure to nitrogen dioxide, even in the short term and at low levels, can cause respiratory effects. Children are at increased risk from illnesses associated with gas stove pollution: living in a home with a gas stove increases their risk of having asthma by 42% – which makes people more vulnerable to COVID-19 as asthma is a predisposing factor for severe illness from COVID-19. (Rocky Mountain Institute)
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Renewables are vital in both pandemic preparedness and response
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By: AMDA, RES4Africa, GOGLA, SCI, SEforAll, WBA, RMI, TERI, UNHCR
- Due to restrictions on non-essential travel/movement in India, a shortage of farm workers has led to delay in the harvesting of crops which will hamper our food production. The farmers and farm labourers are at the receiving end of this undesirable situation and the food is getting lost due to issues in the supply chain. The wastage and loss of food could be minimised with a better prevalence of cold chain market and infrastructure in the country. Decentralised models such as solar-biomass cold storage can help preserve horticultural produce, giving farmers the freedom to look for the best price and providing a buffer in uncertain times like the Covid-19 crisis. (The Energy and Resources Institute)
- In a time where practicing good hygiene is essential for preventing the spread of viruses, such as coronavirus (COVID-19), many of the world’s poorest find themselves at a higher risk of contracting coronavirus because they don’t have access to proper sanitation systems and healthcare. Building solar panels to power water filtration systems, bathrooms and pipe systems increases access to clean water for households without access to their own clean water supply, helping to protect them from infectious diseases. (UNHCR)
- Off-grid solar products could literally be lifesaving for many families and communities. These products help keep people well-informed about health advice and government updates by powering radios and TVs and charging mobile phones. Access to reliable information and guidance is essential to prevent and slow the spread of the virus. As ‘stay-at-home’ measures spread and the risk of ill-health increases, good quality lighting can improve comfort and quality of life. Productive use accessories and increased productive hours can build resilience in household income strategies to help weather the economic shock that is likely to accompany the pandemic. (GOGLA)
- While social distancing is helping reduce the spread of COVID-19, that precaution also impacts access to cooking fuel that is typically obtained at busy open-air markets in developing countries. Solar cooking is an appropriate, clean, and sustainable cooking solution that can enhance food security and resilience for individuals and communities impacted by COVID-19. With solar cooking, the cooking fuel is essentially delivered directly to homesteads, for free, with no need to venture out into these busy village markets. (Solar Cookers International)
- Food preservation is important for all during times of social distancing and under policies for staying at home during pandemics. Solar dryers are an appropriate and accessible technology for food preservation and can increase food security and resilience at the single-home and community level. (Solar Cookers International)
- Securing operations – keeping existing DRE systems running is top priority for many companies. This necessitates having to be designated an “essential service”, and ensuring the supply chain and logistics. (SEforAll)
- Countries have realized the critical importance of energy security and the essential need for continuous supply of electricity and heat to end consumers. In this regard, liquid biofuels, biogas, pellets and wood chips for heat and electricity currently provide essential and on demand energy. As governments around the world are responding to the pandemic with recovery packages, it is important to keep in mind the biggest threat being faced by humanity: climate change. Bioenergy and other renewable energy sources should be the central pillar of governments’ plans to stimulate economic growth as well as accelerate the transition to a sustainable future. (World Bioenergy Association)
- health clinics and hospitals in sub-Saharan Africa and much of the developing world still remain underserved by the electrical grid. According to the World Health Organization (WHO), one in four health facilities has no access to electricity, and only a third of hospitals have reliable electricity access. COVID-19 is exacerbating the situation as the pandemic spreads across sub-Saharan Africa. Health facilities require stable power to provide 24/7 care and avoid unnecessary increased mortality. For critical health services like oxygen provision, policymakers are increasingly turning to renewable energy options. Solar PV and battery storage-based distributed energy resources (DER) are more resilient during crises and are cleaner and more cost-effective either as an alternative to, or supplemented by, diesel generator use where 24/7 power is required. The diesel generator supply chain is riddled with volatility. During crises, diesel prices soar, supply becomes scarce and transportation can be difficult. Distributed renewable energy solutions offer a reprieve. After installation, solar PV and lithium-ion or lead acid batteries do not require a supply of a commodity. (Rocky Mountain Institute)
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IV. Guidance for governments
Need for government support and clear guidelines to reduce investment uncertainty
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By: ACORE, IRENA, RMI
- The current uncertainty about the ability to qualify for and monetise tax incentives will have real and substantial negative impacts on clean energy project financing. (ACORE)
- Governments need to provide public financial support to safeguard the RE industry and mobilise private investment. (IRENA)
- Humans have a long history of mobilizing quickly and effectively to confront great challenges in times of crisis. Why, then, don’t we see a similar intense focus on innovation and deployment of climate solutions? Certainly, it is easier to focus on a single virus than on the myriad challenges of climate change. This is partially due to the high amount of upfront capital required for most renewable energy projects, which don’t offer rapid returns to early stage investors, as well as the highly regulated and complex nature of energy markets. Because of this, climate tech lacks a smooth and integrated development, funding and scaling pipeline. COVID-10 makes this situation even more complicated, as start-ups do not have access to debt markets or lines of credit to help them weather the storm. This is not the first time that climate tech solutions have faced near-total annihilation. During the 2008 global economic crisis, sources of capital dried up, customer purchasing power declined, and many start-ups failed. These failures generated poor investor returns, which further reduced investment and contributed to a “death spiral” that made “CleanTech” a toxic investment category for more than a decade. We lost an entire generation of climate tech innovations and the sector still hasn’t completely recovered. However, crisis is an opportune time for investment while valuations, labour, and material costs are low. For example, Tesla acquired its Fremont facility and significant quantities of manufacturing equipment at deep discounts in 2010 (including a $50 million Schuler press for $6 million). Accessing government funding is especially complicated for start-ups. Early stage start-ups may be pre-revenue and lack either tax or credit history, disqualifying or making it more difficult to work with funders, while later stage ones that have received venture capital or private equity money are often ineligible for small business loans. Government should focus its intervention on expanding the resources of and fast-tracking applications to established and successful grant making agencies, and providing incentives for active investors to spur available fund deployments. Promoting additional and diverse investment by offering supportive funds and policies that shift risk profiles (e.g., matching government funding, deferred tax payments) can greatly shift investment criteria to favour faster deployment of available funds. Using the current moment to clarify feed-in-tariffs, standards, tax credits, and other market drivers is also a powerful tool to de risk investments and stimulate focal points for innovation. (Rocky Mountain Institute)
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Need for renewable energy support to be integrated in stimulus packages
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By: 350.org, C40, Energy Watch Group, European Geothermal Energy Council, European Parliament, European Renewable Energies Federation, Fundación Energías Renovables, GWEC, Iberdrola, UNDP, World Resources Institute, BNEF, WWEA, OECD, IEA, EKOenergy, European Geothermal Energy Council, European Renewable Energies Federation, Solar Power Europe, IHA, IRENA, World Bank, Energy Cities, BEE, RMI
- Makes sense to extend existing fiscal incentives for an extra year for the projects that were delayed because of COVID, but direct support of renewable energy projects is unlikely to be a smart way to spend stimulus money as wind and solar are already so cheap. The issue is not so much making it cheaper, but addressing the structural issues that could hold back its deep penetration into grids. Think about interconnections, storage, smart charging and enabling demand response to compete in the flexibility markets – as well as accelerating the electrification of heating, transport and industry. (BNEF)
- Another smart way to stimulate investment in clean energy would be to buy down the closure of aging fossil fuel plants – but only on condition that they are replaced with renewable-plus-battery combinations (which can be packaged with concessional debt or debt guarantees), not just as largesse for shareholders of assets that would anyway soon be stranded. (BNEF)
- Decentralised approaches such as community power have to be in the centre of all long-term recovery programmes. Participation and inclusion will not only strengthen economies around the world but will also be key to address the climate crisis. (World Wind Energy Association)
- Systematically evaluate possible unintended negative environmental impacts of new short-term fiscal and tax provisions. While the priority is rightly on providing urgent relief to impacted businesses and individuals, a careful screening of the environmental impacts of stimulus measures would significantly add coherence to policies and avoid creating perverse and unintended environmental consequences that might damage the future resilience and environmental health of societies. (OECD)
- Make sector-specific financial support measures for carbon-intensive industries conditional on environmental improvements where possible. The use of financial support measures such as preferential loans, loan guarantees and tax abatements could be directed towards supporting stronger environmental commitments and performance in pollution-intensive sectors that may be particularly affected by the crisis. (OECD)
- Governments can achieve both short-term economic gains and long-term benefits by making clean energy part of their stimulus plans. Large-scale investment in renewable energy projects should be a cornerstone of the emerging national strategies to “firewall” economies against the impact of the coronavirus pandemic. (IEA)
- Governments are discussing stimulus packages worth hundreds of billions of euros that could lock in investments and technological developments in key areas for the energy transition for years after the corona crisis has passed. This is an opportunity to reset the economy on a more climate-friendly path with “green stimulus packages” that align spending with emissions targets – for example by investing in sustainable infrastructure, or tying company bail-outs to commitments to decarbonise. (Clean Energy Wire)
- Need to bring forward investments in a zero-carbon infrastructure, as this is the most cost-effective route to economic recovery on a national and supranational level while at the same time preparing the grounds for a secure and sustainable energy system. (EKOenergy, European Geothermal Energy Council, European Renewable Energies Federation, Solar Power Europe)
- Need to use the stimulus packages to accelerate investments in energy efficiency, renewable heating and cooling, electricity, mobility, zero-carbon buildings, and industrial processes. (EKOenergy, European Geothermal Energy Council, European Renewable Energies Federation, Solar Power Europe)
- Need to ensure that the ongoing supply of clean energy and ongoing investments in energy transition can continue in the current pandemic as essential services. (EKOenergy, European Geothermal Energy Council, European Renewable Energies Federation, Solar Power Europe)
- Future economic stimulus packages will provide unprecedented opportunities to focus on renewable and sustainable energy infrastructure. To be ready for these opportunities, hydropower companies should have shovel-ready projects in place for the post-COVID 19 economic stimulus plans, and make sure the projects have been assessed against the Hydropower Sustainability Tools. Companies should also demonstrate renewable coordination through hybrid projects, such as solar PV or pumped storage alongside solar or wind power. (IHA)
- Current policies do not do enough to honour the “double dividend” that green start-ups provide by boosting the economy while also increasing sustainability. (Clean Energy Wire)
- Many renewable technologies can be ramped up relatively quickly, helping to revive industries and create new jobs. Governments need to revise labour and education policies to foster a just transition and help workers make the shift into renewable energy jobs. (IRENA)
- Stimulus packages and policies should address short-term challenges facing the renewable energy sector as well as the longer-term structural shift towards a low-carbon economy. (IRENA)
- States around the country are looking at the buildings sector—a significant source of emissions—as an important piece of the puzzle to tackle and an opportunity to develop a new workforce. For example, as heat pump deployment goals come into play alongside increased consumer awareness and interest, however, there is a shortage in the supply of trained heat pump installers to meet this growing demand, and a lack of familiarity with the technology among the Heating, Ventilation, and Air Conditioning (HVAC) community. There is an opportunity to fill this gap through heat pump training programs, and to do so in a virtual environment, as has been seen in New York and Vermont. New York State Energy Research and Development Authority (NYSERDA) has a directory with at least 15 different heat pump related training courses. Efficiency Vermont has assembled a resource hub of on-demand, video-based training including an introduction to heat pump water heaters and proper installation techniques. After watching the training, contractors can take an online quiz to become members of the Efficiency Excellence Network in Vermont. (Rocky Mountain Institute).
- Not only do we need decisive fiscal action to avoid a deep and potentially long-lasting economic downturn, but we also need a strategic focus on green and low greenhouse gas solutions to help turn things around and reduce the severity of future crises. We can make recovery investments that lead to practical fixes to our infrastructure and put us on a path to strategic transformation, if we plan them carefully. For example, public transit has garnered a great deal of attention in stimulus discussions, as transit agencies across the country continue to struggle through this crisis. Some agencies are reporting over 80 percent reductions in ridership, and many are questioning what a return to normal will look like. there is an opportunity during this time of reduced ridership to repair and retrofit unused buses, and to swap out portions of the fleet with electric buses, set up charging, and pilot new solutions.
- Factoring in sustainability in the broadest sense means also including longer-term criteria: decarbonization, long-lasting resilience and adaptive capacity, the impact on physical, natural and human capital, among others. Over the short term, there are three main considerations: 1. Job creation, 2. Boost to economic activity, 3. Timelinesss and risk. Over the longer term, a project must also support countries on three different dimensions: 1. Long-term growth potential, 2. Resilience to future shocks, 3. Decarbonization and sustainable growth trajectory. (World Bank)
- Need a European Recovery Fund with the Green Deal as its backbone. Fighting climate change and building economic resilience are the same single agenda. We see 3 key strategic actions Europe can undertake: 1.) Include local resilience pacts as the main delivery mechanism for the recovery strategy. This would help them and their communities to jointly redefine their relationships to local ecosystems and their respective responsibilities and commitments to absorb external shocks. 2.) Align the EU’s economic governance to the ecological and social emergency. This can be done by climate proofing and mainstreaming all EU funds and programmes, and applying the same logic to Member States’ fiscal and budgetary policies. 3.) Build strategic autonomy in vital supply chains by reducing resource and energy demand and relying on solidarity between territories. Therefore, redefine the EU’s energy policy to include an energy sufficiency objective and to increase drastically the share of local sources, notably by applying a district-level approach to the Renovation Wave initiative and by fully leveraging the local heat potential within the upcoming smart sector integration package. (Energy Cities)
- A global energy transition can almost quadruple the number of jobs in the field of renewable energies to 42 million by 2050. GDP growth would be 2.4% higher than the current plans by the middle of the century and the profit would far exceed the investments required to transform the energy system. Each dollar invested in renewable energies in turn brings in between three and eight dollars. The energy transition is paying off ecologically and economically. Obstacles now need to be removed, investment incentives and international cooperation strengthened. (BEE)
- The Energy Transitions Commission, a global coalition of businesses in the fields of energy, industry and finance, argues that history highlights how making clean energy a priority in stimulus packages can be of job creation in the following years, citing US spending after the 2008 financial crash, which created 900,000 jobs over a 5-year period by prioritising clean energy spending. Accelerating renewable energy investment in the recovery phase of the pandemic would deliver global GDP gains of $98 trillion above a business-as-usual scenario by 2050, according to IRENA. Suggested reforms include removing fossil fuels consumption subsidies, which are “unnecessary in a period of low prices,” and “to increase fossil fuel taxes without triggering significant consumer price increases.” Other areas to prioritise in the recovery phase include zero-carbon hydrogen production, low-carbon fuels for the shipping and aviation sector, and low-carbon materials like green cement or green steel as well as circular business models and digital solutions for energy efficiency https://www.euractiv.com/section/energy-environment/news/energy-firms-rally-behind-green-stimulus-call/
- A major survey (100’s of central banks, G20 finance ministers, and researchers form 50+ countries), published 05/05 by renowned economists (incl. J. Stiglitz) in Oxford Review of Economic Policy, demonstrates that Massive programmes of green public investment would be the most cost-effective way both to revive virus-hit economies and strike a decisive blow against climate change. https://www.bloomberg.com/news/articles/2020-05-04/world-s-economists-agree-economic-stimulus-ought-to-be-green
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Access original sources in this spreadsheet.
