Will COVID-19 Permanently Change the Energy Sector?

The world's energy system will never be the same after the pandemic. And that might be a good thing.

This piece was first published by Perry World House. It is republished with their permission.

In Zoom meetings, around dinner tables, in the quiet of our own minds, everyone during the COVID-19 pandemic has heard the same question: “when can we return to normal?” Yet, that question obscures two presumptions, especially when talking about energy. First, the question neglects the many segments of the U.S. and global populations for whom the old normal was not working and who feel no enthusiasm for its return. Second and perhaps most visibly in the United States, the question assumes a tradeoff between restoring public health and restoring economic activity.

COVID-19 will produce permanent changes in the energy sector. But these changes should have been happening already and were often underway at a pace that will now accelerate. The direct effect of the pandemic has simply been to expose the failures of legacy energy systems on a wide range of problems: climate change, economic prosperity, energy access, and human health. Thus, “getting back to normal” in our energy systems is not just an obfuscation, it is a dangerous organizing principle for policy.

Recent news stories have cited an analysis published in Natureglobal emissions are estimated to have fallen 17 percent during the period in which governments around the world imposed lockdowns, which peaked in early April when “89% of global emissions were in areas under some confinement.” Much of the decline comes from the fall-off in aviation and surface transport. Such a decline is a powerful and accessible lesson in the connection between greenhouse gas emissions and how we move and travel.

Another important trend to consider is telework. As I write this (at home), my newsfeed is reporting the announcement by Facebook that up to half of its workforce will eventually work from home on a permanent basis. This continues a trend started when the insurer Nationwide announced weeks ago that it was permanently closing five of its nine regional offices and allowing employees to work from home at those locations.

If more employers make such decisions, this trend could have major implications for our transition to renewable energy. Perhaps the single most important factor in the pace of transition to zero-carbon economies is growing energy demand, which makes it difficult to build enough fossil-free energy supply. But to cross the streams, in the words of Peter Venkman in Ghostbusters, COVID-19-could change the organization of work so quickly as to make a rapid transition to zero-carbon energy systems much more likely.

Finally, the pandemic has made us think anew about resilience, and if applied to the energy system this principle could further bolster renewable energy. By definition, renewable energy is less prone to supply interruptions than fossil fuels, and when coupled with distributed energy grids can create built-in resilience when one part of our energy system is struck by disease or disaster. Emerging energy technologies that empower energy consumers to become virtual producers in a crisis by dispatching their curtailed load will make it possible to deploy huge amounts of energy to places that need it most Localized solar, wind, hydro-, and geothermal energy production will end the extraction and transport of hydrocarbons from vast and remote landscapes, and restore the ecosystems that protect our food, water, and health.  

Energy systems will change permanently in the world after COVID-19 because the pandemic has exposed the vulnerabilities, inefficiencies, inequities, and mendacities of an old energy normal that was finding new ways to kill us with every decade and year. The result will be changes in energy demand that are renewable-friendly (i.e., from fuels for physical travel toward electricity for online), a new focus on accelerated investment in resilient energy supply that fail and recover gracefully to meet these changing demands, and a robust policy commitment to the infrastructure and full-cost accounting needed to build and sustain this new energy supply and demand.  These are the basic features of the post-pandemic energy system.

Mark Alan Hughes

Director Emeritus
Mark Alan Hughes is director emeritus of the Kleinman Center. During his time as faculty director, he led the Center and wrote on topics ranging from deep decarbonization to the future of Philadelphia’s energy landscape.