In spite of the drastic impact that COVID-19 is having on the global economy, a recent study from Lux Research, says that the energy transition has been accelerated by several years during this period.
In its report titled “Owning The Energy Transition: 2020 COVID-19 Update”, the leading provider of tech-enabled analysis and advisory services say that trillions of dollars are predicted to flow through economic aid packages to implement low and zero-carbon infrastructure, as well as research and development into technologies that allow it.
Lux analysts discussed these developments and further estimated the effects of the disruptive changes in the future of global energy transition.
Yuan-Sheng Yu, senior analyst at Lux Research clarified that while the sudden effects may not be repeated as the world returns to normalcy, 2020 offered a snapshot of the industry’s more enduring problems over the next decade.
It would push businesses to learn how to be more resilient, while countries preparing their post-COVID recovery can capitalize on the opportunity and accelerate the energy transition by enhancing resilience and agility, and isolating themselves from the unpredictable traditional energy sector.
“The aftermath of COVID-19 will shake the economic fabric of the energy sector. We witnessed many historical firsts, such as oil futures trading in the negatives, US renewable energy in the electricity mix surpassing coal, and the largest year-over-year drop in global CO2 emissions.”
The pandemic highlighted the risks of disruptions to the current energy infrastructure and supply chain. In response to this, the world will witness an aggressive diversification of business portfolios to avoid the risk.
The study highlights countries moving ahead with hydrogen-centered decarbonization policies such as Portugal, South Korea, Germany and Australia. Germany recently launched a National Hydrogen Strategy worth $10.2 billion.
COVID-19’s most noticeable impact on daily life was also the drastic decrease in mobility, the study said. As the world population was forced to stay indoors, emissions were dramatically lowered and air quality improved, with people of some cities infamous for pollution seeing blue skies for the first time.