COVID-19 Crisis Wreaks Havoc in the Energy SectorBy Dalia Maria de León | Fri, 03/20/2020 - 13:05
COVID-19 Crisis Wreaks Havoc
COVID-19’s crisis wreaks havoc in the economy worldwide. In the energy sector, the solar energy industry is one of the first massively affected. In Mexico, natural gas supply is guaranteed during the pandemic crisis.
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COFECE invited decision-makers from the electricity sector, public institutions, union powers, users and licensees, civil society organizations, business chambers and all interested parties to answer a questionnaire related to the CELs market, which will follow LTE standards, which establish that two years after the enforcement of CELs obligations, the commission must carry out an evaluation of the competitiveness of this market and issue recommendations to improve its performance.
Representatives from member-companies of the Mexican Association of Natural Gas (AMGN) said they are prepared to continue supplying gas to homes, services, industries and public transportation, while dealing with COVID-19 restrictions. AMGN says it is already working on the necessary measures to maintain the quality, reliability and safety standards of its workers and to not have any shortages in supply of natural gas.
Supply to power plants is a priority, because it is extremely important to maintain health services active and to supply to quarantined citizens who remain at home.
There could be million-dollar losses that companies could take at least three years to recover and that would seriously affect the adoption curve of clean-energy technologies. A study made by BloombergNEF estimated that 2020 will be the first year that will have a contraction in solar energy growth and development since the late 1980s. This sector will be highly affected because 90 percent of its manufacturing and raw materials come from China. Therefore, the entire supply chain will be affected.
The economic slowdown could also impact the adoption of rooftop solar systems, a leading booster of solar energy. This is a worrying situation for Mexico since there are no incentives and subsidies for the adoption of these systems.
Germany’s solar energy association BSW warned that component delays and staff shortages caused by the global COVID-19 outbreak could drive companies to miss deadlines set in auction contracts, putting them at risk of losing eligibility for state support. In Germany, the COVID-19 crisis is now impacting what is Europe’s largest solar market at around 50GW of installed capacity. Politicians have also urged the federal government to increase the size of solar tenders.
Renewable energy industries began lobbying to ensure an economic response to the COVID-19 outbreak. As customer demand for solar energy plummets and companies see significant construction slowdowns, there have been project cancellations, labor shortages and several logistic problems tied to equipment and delivery delays. Because of this, five renewable energy groups and an energy storage trade association sent a letter to the White House and Senate leaders calling for immediate support and extensions of tax incentives to help the clean energy sector navigate the impacts of the COVID-19 outbreak.
The Unite Union has urged the UK government to class energy employees as ‘key workers’ so they can keep power and gas supplies running smoothly during the COVID-19 pandemic. This would mean energy and utility workers would be immediately on the list of those whose children would be provided with access to schools, even though most of them remain shut indefinitely.
Sources: Reforma, El CEO, COFECE, PV-TECH, Renews.biz