Within a twinkle of an eye the coronavirus struck, sending oil prices crashing. The price plummet was so precipitous that at a point, a barrel of crude cost less than a meal at any fast food restaurant. The suspension of exploratory works, slashing of projected crude oil receipts, job losses, diversification of investment from fossil fuel, withholding of shareholders’ returns, filing of bankruptcy et cetera were the dominant features of the crude market in the first and second quarter of year 2020.
Aside the hydrocarbon sector, many other sectors have been battered by the pandemic, sending the global economic to record lows.
Experts have suggested that the only recovery from the pandemic is a green recovery. That “as countries rebuild economies from the impacts of the pandemic they are faced with a unique once-in-a-generation opportunity to recover better with sustainable energy.” It will therefore not be shocking that the post-COVID-19 era will be jam-packed with sustainable energy related programmes, and laggard governments that are slow to adopt and advance their renewable energy resources, risk being left behind – or worse, will completely be shut out. They will suffer consequences such as slow social and economic development, augmented environmental problems resulting from continued reliance on fossil fuel energy resources.
The world as we have come to know, have never had a better chance to make a greener space.
Aside the cost benefits, the coronavirus pandemic has brought about unusual environmental benefits with respect to lower carbon emissions, cleaner air, and respite for wildlife. What remains is the sustenance of these benefits, capitalizing on the moment.
There is also a strong consensus that renewable energy is the future emerging segment for the energy industry. It means that aside aiding curb in the rise in global temperatures and providing a cost-effective power, renewables provide an opportunity for investors across the energy industry.
The current crisis looks likely to accelerate the shift towards renewable energy; raising hopes for a greener future. The expectation is that the renewable energy area will be the most resilient in the energy industry following the International Energy Agency’s (IEA’s) warning that investment in global energy would fall by US$400 billion. In China and Europe, renewable energy investment has gone up by more than 40 percent in the first half of the year, even as the pandemic triggered an unprecedented economic shock.
Covid-19 has changed the world in many ways. It has changed the way we eat, the way we work, the way we communicate, and all that. The recent IEA report “World Energy Investment” published in May 2020 describes drastically changed energy markets in the wake of the pandemic. The report reveals the largest fall in energy sector investment ever and uncovers historic shift along the way. It shows that for the first time ever, there will be more spending on electricity than on oil. Most importantly, the report asserts that it is in the power sector where the possibilities of transition to a low-carbon energy sector are most apparent.
While expected to see Covid-19 affecting renewable energy investments through delays in the financing process and to some auction programmes, some investors have proceeded to give the greenlight for projects in the green energy space. The resilience coupled with the falling cost of power generation from renewable energy resources has led to the forecast of a significant increase in green investment post-Covid-19.
With the lowering cost, renewable has demonstrated its robustness, stability, sustainability, and cost effectiveness over this malignant Covid-19 period unlike the crude oil market. The shift from a hydrocarbon based energy production to renewable energy sources is pushing lot of investors, fund managers, and oil majors to diversifying capital into renewable energy sources.
In Africa and particularly Ghana, a crucial source of concern is the worrying trend of lack of access to affordable electricity and the unsteady nature of electricity supply; factors which have been impediments to development and energy security.
According to International Renewable Energy Agency (IRENA), the green energy sources are rapidly becoming cheaper than fossil fuel powered plants. The agency finds that 56 percent of capacity additions for utility-scale renewable power in 2019 achieved lower electricity costs than cheapest coal plants. If the costliest 500 GW of existing coal plants were replaced by solar and wind, IRENA projects a 23 billion annual potential savings. In addition, 1.8 gigatons of carbon dioxide reduction on annual basis is possible, equalling to 5 percent of the total global carbon dioxide emissions last year. Lastly, a cumulative global gross domestic product (GDP) will grow by US$98 trillion, according to IRENA.
On the back of these, the Institute for Energy Security (IES) seeks to lead the discussion on a greener environment from the front. The IES sees energy transition conversation as a global dialogue. Africa must of course be an active participant in the dialogue and adoption, because of the enormous job opportunities associated with renewable energy production, i.e. drastic reduction in electricity tariffs, decarbonisation and minimization of climate change related disasters. The renewable energy conversation does not mean pulling the plug on fossil fuel overnight but rather providing the needed catalyst to ensure adequate energy mix especially in Africa, on the back of its associated electricity challenges.
In the next months ahead, IES hopes to investigate the prospects for a new green settlement. The institute is taking the step to highlight the various institutions that are taking up the challenge to introduce renewable energy in the country’s power generation mix. We will be engaging, assisting and collaborating with the media to report on efforts of institutions, individuals, communities, and political actors who are fearlessly taking up the challenge of greener energy adoption and the preservation of human lives.
We will continue to amplify the arguments to businesses, government and decision makers, to consider the adoption of renewables now, and post-Covid-19. We will continue to inform the public on the threat to the environment based on scientific facts, an education not driven by political and commercial interests.
IES’ proven record of accomplishment, research-based and data-driven insights into the energy sector over the years coupled with its credentials of independence, suit it well for the task ahead. We are largely counting on the media to deliver the kind of open, committed and independent journalism on renewable energy.