COVID-19 has had a profound effect on the world and how we, as Australians, live and work. The public health, economic and social impacts of this pandemic are all encompassing and yet to be fully understood. In such an uncertain and extraordinary global situation, it’s critical to state unequivocally, as AEMO did last week, that Australia’s energy systems and markets are currently operating in a safe and secure state, as the nation continues to respond to the fast moving COVID-19 threat.
But with crisis centres springing up in countries around the world, and strict lockdowns enforced across Western Europe and the United States, how is the global energy industry faring during this pandemic?
According to reporting by Energy Magazine, COVID-19 is having major impacts on energy operations, especially global renewable projects such as solar and wind (but also in Australia) due to supply chain disruption. They also note that many critical renewable project components and materials come out of Asia.
PWC, in their recent report on the pandemic, stated that, ‘Project Owners and other solar industry participants will need to adopt a measured approach in the face of supply chain disruptions caused by COVID-19, culminating in a commercial, whole of project resolution to ensure projects progress to completion and generation.’
The spread of COVID-19 is having impacts on global trade, travel (both personal and business), energy and on companies themselves – with share prices and workforces impacted. It has also been widely reported that the vast majority of energy conferences and events have had to be cancelled or postponed in 2020 due to the virus.
Overseas, Reuters has reported that in New York, Consolidated Edison Inc (Con Ed as its colloquially known) which provides electricity to around 3.3 million customers and gas to about 1.1 million customers in New York City and surrounding areas, was taking steps to keep critical employees healthy, including separating some control centre personnel to other locations where they can perform their duties safely.
Similarly, EDF Energy, which services nearly 6 million residential and business customers in the U.K advised that they are pursuing similar tactics with remote workforces where feasible, temperature checks at sites, extra cleaning and changes in movement patterns.
But even with pandemic responses being enacted around the globe, Wired Magazine reported on a recent study conducted by the University of Chicago’s Energy Policy Institute found that electricity demand in Italy has plunged by 18% following the severe increase in coronavirus cases there. Energy demand in China also plummeted as a result of the pandemic but is slowing rising again as restrictions are lifted in some of the impacted Chinese urban areas.
Whilst AEMO is aware of these reductions in electricity demand internationally due to COVID-19, especially in countries that have closed borders (such as the above), locked down people movements and closed large industry, we are working with local and international forecasting experts and system operators, sharing techniques and lessons learned to improve forecasting capabilities and our ability to maintain safe and reliable energy systems during this dynamic COVID-19 period.
This week, we have started to observe relatively small changes to the demand profile in a number of regions as a result of business restrictions being progressively altered. It is expected that there will be greater changes and potential reductions in demand over time, as seen in international examples, as more restrictions are announced.
We are continually monitoring the performance of all forecast models to determine whether model updates or forecast adjustments are necessary. AEMO is now enacting its full suite of pandemic responses to provide the maximum possible protection and resilience for its critical operations and people. We are also working with the energy industry including electricity generators, gas facilities, network businesses and other market participants to support additional pandemic management actions across the sector.
As per our original media statement on the pandemic response last week, AEMO will continue to support federal and state governments in considering additional measures which may be required to support the security and reliability of the energy system during the COVID-19 pandemic.
We will continue to keep you updated on all the latest pandemic related responses and activity domestically and internationally so stay tuned for more on this evolving situation.