The last few months have seen the world roll into a turbulence that has left many asking if we are about to slip into a global recession and as governments struggle to contain the virus, the different economies have been severely disrupted. Kenya’s economy in particular, is one of Africa’s high risk exposures due to COVID-19. This is according to a report by South African based Rand Merchant Bank. The research says that Kenya’s economy has the highest overall COVID-19 risk score at 27 points, followed by Ghana at 24.
But what does this mean to the energy sector? The truth is, any form of economic surge has a direct impact to the energy sector, because every form of economic activity usually requires electricity; either directly or indirectly, and with the current situation where most industries risk closure, the demand for electricity has gone down. More people are also resorting to work from home resulting to a lower demand of oil and gas.
The renewable energy sector has been fighting for adoption over the last few years and COVID-19 is about to slow that process even further. Energy research Firm, Rystad Energy, has stated that one of the major and worrying effects of Coronavirus to the energy sector is a complete halt in the renewable energy installations; and the impact is being felt across the clean energy sector.
It is not all doom when talking about the effects of Coronavirus to the global economy and more so the energy sector. One of the positives is that, due to slow down in industrial activities, travel, and temporary closure of some other industries, air pollution and greenhouse gas emissions have significantly reduced. This is remarkable, especially because there is a prediction of a further decline in the next few weeks. However, it is not the right lesson to pick from the reduction of emissions into the atmosphere. It shouldn’t take a global pandemic to reduce emissions. It should actually be a light bulb moment for us to find ways of reducing carbon emissions every day.
The global pandemic is also likely to derail the process of renewable energy. Over the past few years, renewable energy technologies like wind turbines and solar PV had gained momentum and was well in the way to reducing the amount of greenhouse emissions into the air, but the crisis caused by the novel Coronavirus could considerably disrupt this process, unless governments step in and continue with the idea of meeting climate goals and sustainable energy solutions, even amidst the current crisis.
Renewable energy was becoming more competitive and attractive due to the lower costs on the consumer’s end, but it currently faces some challenges like; supply chain disruptions, risk of not benefiting from government incentives, and reduced investment due to pressure and uncertainty caused by the virus. This pandemic has brought a threat to the clean energy transition, with China which was the most affected country initially, being the main global producer of clean energy technologies like solar panels and wind turbines. The virus however disrupted this supply chain and this is why governments, Kenya included, need to keep clean energy transitions as a priority even as they respond to the global pandemic.