Release date: 01-10-2020SKU: MSG-GL-COVID19-010
MSG explores the top risks and opportunities impacting the energy sector, owing to the prevalence of COVID-19.
Power is the essential element of any sector to witness economic growth, especially in emerging markets. There is comprehensive advancement in Sustainable Development Goal (SDG) across the world, as it is growing to demand to ensure affordably, reliable, sustainable, and modern energy concerning health, education, industry, sustainable cities, and more.
Emerging economic markets are especially susceptible to these significant developments. Despite better access to power in developing countries, almost 800 million people remain in the dark worldwide.
An unprecedented decline in demand for mobility
As a consequence of global lockdown measures due to the Covid-19 crisis, mobility – 57% of global oil demand – declined at an unprecedented scale in early 2020. Road transport in regions with lockdowns in place dropped between 50% and 75%, with global average road transport activity almost falling to 50% of the 2019 level by the end of March.
Lockdowns have also driven decreases in electricity demand.
Global electricity demand decreased by 2.5% in the first quarter of 2020, though lockdown measures were in place for less than a month in most countries. Full lockdown measures pushed down electricity demand by 20% or more, with smaller effects for partial lockdowns. After correcting weather effects, full lockdowns have reduced daily electricity demand by at least 15% in France, India, Italy, Spain, the UK, and the US northwest. The enormous impacts have been felt in economies that implemented strict measures and those where services make up a larger part of the economy.
Energy investment is set to fall by one-fifth in 2020
Almost all investment activity has faced some disruption due to lockdowns, whether because of restrictions on people or goods' movement or because the supply of machinery or equipment was interrupted. But the broader effects on energy investment spending in 2020, especially in the oil, stem from declines in revenues due to lower energy demand and prices, as well as more uncertain expectations for these factors in the years ahead.
COVID-19 impacts the energy sector, particularly by reducing demand, financial stress, and power supply chain disruptions.
To read more about how we believe the energy sector can manage the current pandemic scenarios, inqure about our report.
Key Issues Addressed
Considering the COVID-19 impact on the energy industry is carried out through various lenses, and many critical issues identified in the COVID-19 impact strategic insight report include:
• Specific key trends have begun to accelerate due to the crisis, reshaping both demand and supply across industries
• Other trends that probably decelerate or halt due to the COVID crisis
• Trends that are essential before the pandemic and post-pandemic directions to shape the industry
• Key uncertainties and challenges that should be considered in strategy and business planning
• Detailed consideration of scenarios that compare the reach of the pandemic versus the industry impact arising from changes in end-consumer behavior
• A set of both recovery and thrive oriented actions for market participants and players
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