The Smart/Renewable Energy industry is heavily impacted by the spread of COVID-19. I chose to read an article from Smart Energy International titled “US: Five Ways COVID-19 Could Derail Renewables” by Philip Gordon. This article is from March 27th, 2020, so it is very recent. This has to do with Global Corporate Citizenship because companies need to give society’s health and safety the priority instead of focusing on how to make a greater profit.
The first issue this industry is dealing with is that the virus is steering away the attention from energy and environmental policies and instead only focusing on initiatives that have to do with the pandemic. Furthermore, fossil fuel prices are falling because of declines in demand for it, and therefore, the demand for renewables will fall the more this continues. Additionally, the article said that “As the stock market continues its free-fall, a recession appears to be inevitable, which could adversely impact renewables” (Gordon, 2020). Protecting the environment has sometimes been considered a “luxury good”, and therefore, the demand for clean energy will most likely decline with the economy.
Another issue is that right now, there is not really a need for renewable or smart energy because a reduction on fossil fuels is naturally happening because of COVID-19. Less people are outside driving around and using fossil fuels, so the level of carbon emissions from automobiles, planes, and retailers have gone down. For example, China experienced around a 25% decline in carbon emissions when the coronavirus first occurred (Gordon, 2020). After all of this, it is possible that work patterns and the way business is done may shift. Virtual offices and less commuting may become more prevalent, therefore decreasing the nation’s carbon footprint. This is another reason why renewables may not be needed, therefore affecting the industry.
Even though there are challenges which the Renewable Energy Industry has to deal with, this pandemic could ultimately help renewables. The article says “As oil prices fall, wells may be shut in, decreasing the supply of natural gas into the market, potentially raising natural gas and electricity prices. The perceived need to prepare for the next pandemic with self-sufficient, sustainable homes or microgrids could increase distribution-level demand for renewable resources” (Gordon, 2020). Although there are many ways the industry has been negatively impacted, this is one way that it could be benefitted.
Gordon, Philip. “US: Five Ways COVID-19 Could Derail Renewables.” Smart Energy International, 27 Mar. 2020, www.smart-energy.com/renewable-energy/us-five-ways-covid-19-could-derail-renewables/.