NAME: Kayseri Persaud USI: 1034536

COURSE: ENV2204 DATE: 5th June, 2021

How has COVID-19 affected the Global Energy Industry?

Introduction:

COVID-19 is a virus that has imprinted itself on the world and as its name suggests, the virus
started a pandemic in 2019 and is still ongoing. This pandemic has affected so many aspects of
our life, such as social, economic and environmental. Businesses and Industries have especially
suffered from this pandemic as it has caused drastic changes in demand and price. As such, the
Global Energy Industry have faced both advantages and disadvantages as a result of the COVID-
19 pandemic. This essay, therefore, seeks to explore the effects of this virus on the Global
Energy Industry and will go in-depth on what the future of this industry may hold.

The Global Energy Industry and its Importance?

As the name suggests, The Global Energy Industry is a collective term that refers to the
industries and companies that are responsible for anything energy-related around the world. The
energy industry is therefore involved in the production and sale of energy 1. This includes the
electricity in our homes and even the fuel in our vehicles. This industry is important because it
not only provides the basic necessities of our daily life, but it is solely responsible for making
sure the growth in demand for these energy resources is met worldwide. As the world advances,
the third world countries are also moving towards more urbanization and a higher quality of life.
This means that the Energy Industry would have to make energy resources readily available as
this happens.

1 "Global energy industry - statistics & facts | Statista." Accessed June 5, 2021.
https://www.statista.com/topics/6148/global-energy-industry/.
NAME: Kayseri Persaud USI: 1034536
COURSE: ENV2204 DATE: 5th June, 2021

Effects of COVID-19 on Global Energy Industry

Considering all that was mentioned about the Global Energy Industry earlier, as the COVID-19
pandemic arose in 2019, the Energy Industry was affected both positively and negatively. To
break it down, the pandemic has since put many countries on lockdown with curfews and other
regulations. This means that many businesses have since closed or are forced to do less business.
Also, most of the population are prone to stay at home which decreases the need for travelling
and so forth. With all of these circumstances at hand, it is clear that for most of it, the pandemic
has caused a decrease in demand for energy supply worldwide 2. This is because businesses and
factories won’t need as much energy supply as before. To back up this point, this is a chart
showing statistical data gathered for the production of European Solar Energy.

Fig.1 Shows the Change in European Solar Energy Production3

This chart shows the drastic fall in production of solar electric energy for four European nations,
Germany, France, the Iberian Peninsula and Italy from 2019 to 2020. The chart distinctively

2 "Impact of Covid-19 on the global energy sector – pv magazine ...." Accessed June 5, 2021.
https://www.pv-magazine.com/2020/04/24/impact-of-covid-19-on-the-global-energy-sector/.
3 "Fall in electricity markets prices in march due to the coronavirus ...." Accessed June 5, 2021.
https://aleasoft.com/fall-electricity-markets-prices-march-coronavirus-crisis/.
NAME: Kayseri Persaud USI: 1034536
COURSE: ENV2204 DATE: 5th June, 2021

shows how the production grows to its highest peak in June 2019 but begins to seemingly
decrease. This may have been caused by the now arising speculations of the COVID-19
outbreak. As the year ends and progresses into 2020, the production is at its lowest point which
proves that at the moment that the COVID-19 pandemic was declared and a lockdown was
implemented, the demand for this energy was evidently lower than the previous times.

With the increase in rules and regulations, the Renewable Energy sector has suffered slightly as
well. With large countries such as China, being the main manufacturers of these clean energy
sources such as solar panels and such, there is difficulty in shipping these resources worldwide 4.
This is because these countries are also the most affected by COVID-19 and it wouldn’t be
considered safe to continue shipping as per the norm. This means that companies face delays
with the installation deadlines of this equipment. This could be seen in India where 3000MW of
solar and wind projects faced delays because of the lockdown. This goes to show that although
the demand in energy supply is an advantage to the environment, the lockdown has also caused a
hindrance in helping the environment by making available, more renewable energy sources.

Another point solely worth discussing is the decrease in CO 2 emissions as it relates to the
activities of the COVID-19 pandemic. As stated previously, because of the ongoing pandemic,
there are more lockdowns around the world to help in preventing the spread. This lockdown has
therefore caused less human activity around the world. This includes halting of most factory
operations, vehicular activity and other activities which contribute to the emissions. Although
Climate Scientists had a difficult time doing research on the emissions, they predicted a 7% drop
in CO2 emissions by the end of 20205. This was later confirmed by the Global Carbon Project.

These circumstances caused by the pandemic have also had an impact on the monetary aspect of
the Global Energy Industry. This is in terms of the ground payment for the energy supply. It
simply refers to the fact that most countries have implemented postponement of payment of

4 "Impact of Covid-19 on the global energy sector – pv magazine ...." Accessed June 5, 2021.
https://www.pv-magazine.com/2020/04/24/impact-of-covid-19-on-the-global-energy-sector/.
5 "Covid-19 paused climate emissions – but they're rising again - BBC ...." Accessed June 5, 2021.
https://www.bbc.com/future/article/20210312-covid-19-paused-climate-emissions-but-theyre-rising-again.
NAME: Kayseri Persaud USI: 1034536
COURSE: ENV2204 DATE: 5th June, 2021

electricity or water bills for the citizens due to hardship in working to pay these bills 6.No one
knows much about how the expenses for the operations are financed but if this continues, then
the DSOs finances would inevitably deteriorate, hence causing a shortage in working capital to
continue carrying out normal operations.

SWOT Analysis of the Global Energy Industry

S.W.O.T is an abbreviation that stands for “Strengths, Weaknesses, Opportunity and Threats”.A
SWOT Analysis is, therefore, an overview of these four main aspects as it relates to an activity,
more specifically a business or industry. As such, a group of researchers did a SWOT Analysis
on the Global Energy Industry7. The results are as follows:

1. Strengths: The first strength of the Global Energy Industry is that as time progresses,
there is that as time progresses, the world is in demand of more and more energy supply
for providing basic needs of life. With this being said there are growing demands and
more investment into the Industry. This subsequently means there are more entrepreneurs
in the industry which provides a decrease in the rate of manpower employment. Because
of the industry’s importance to the world, it has great support from the government sector
as well as private sectors. This means it also has adequate funding for research and has
become accessible to more customers and markets worldwide.

2. Weaknesses: Although there are many promising strengths, there are still a few
weaknesses that the industry faces as it progresses. The first one being the rise in demand
for non-renewable energy supply. This is a weakness because as the term suggests, these
energy resources are non-renewable which means they cannot necessarily be in
continuous production. This is an obvious difficulty for the industry as it must still its
best to meet these demands. Another weakness is the lack of funds for research.This may
apply to mostly third world countries which simply do not have enough funds to finance
6 "Impact of Covid-19 on the global energy sector – pv magazine ...." Accessed June 5, 2021.
https://www.pv-magazine.com/2020/04/24/impact-of-covid-19-on-the-global-energy-sector/.
7 "Analysis of Economic for Global Energy Strategic Management - AIDIC." Accessed June 5, 2021.
https://www.aidic.it/cet/20/81/229.pdf.
NAME: Kayseri Persaud USI: 1034536
COURSE: ENV2204 DATE: 5th June, 2021

great researches which then makes them dependent on the research and decisions made
by first world countries. This also leads to another weakness which is the lack of
coordination among international Energy Agencies. This means they may not come to
proper agreements or have proper planning done as a team of the Global Energy Industry.
This would obviously cause disputes and delays in the development of certain areas of
the industry.

3. Opportunities: This simply refers to the hopes and goals that the industry wants to fulfil
as it progresses. The first one would be an increase in global and regional cooperation.
This would help hasten the decision-making process of the industry. The second
opportunity would be increased support of renewable energy production. This would cut
the need down for harvesting non-renewable energy which would ultimately decrease the
number of challenges as it pertains to that. Another one would be to have more donors of
funds, which would as well help to create more jobs. Furthermore, the main goal of the
Global Energy Industry would be to continue meeting the demands for energy resources
while still protecting the environment from drastic damage.

4. Threats: The first thing that poses a threat to the Global Energy Industry would be the
weak management of funds. This is important because if funds are not allocated
correctly, then development plans can be flopped and not executed properly. A low level
of participation in this industry can pose threat to the goals and missions of this industry
as well. Another threat is commodity price volatility. This term simply refers to the
fluctuations of price for the said commodity. If this price changes ever so often it can be
hard for the industry to make plans for the production of energy supply. Another threat is
the high import dependence of some countries on others. This is a threat because the
development of projects can solely depend on the shipment of resources and materials for
and if there is a delay, it can be futile to the project.

Given this analysis and the effects of the COVID-19 pandemic, the Global Energy Industry has
little control over the demand for energy supply but is coping well enough. This can refer to the
fact that they are allowing postponements of payment of bills for these energy resources until
NAME: Kayseri Persaud USI: 1034536
COURSE: ENV2204 DATE: 5th June, 2021

things get better. This may pose a threat to the finances of the Industry but it has helped its
customers cope with the pandemic as well. Another thing is that as energy demands have
lowered, there are fewer CO2 emissions which help to fulfil the goal of helping the environment.

Future of the Global Energy Industry

In conclusion, the Global Energy Industry was indeed heavily affected by the COVID-19
pandemic both positively and negatively. Nevertheless, the Global Energy Industry will adapt
and overcome the circumstances at present. As systems are now being put in place to
accommodate for the rules and regulations of the pandemic, the Global Energy Industry should
have their demand, prices and production rates going towards their normal pace. With this being
said, the future of the industry looks quite promising as it may not be hindered by the pandemic
as much. This poses hope not only for the Global Energy Industry but for other aspects of our
life that are dependant on it. This just shows that the Global Energy Industry plays an important
role in our daily lives and will continue to do so as long as we keep advancing.