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.
For all the latest news, insights and analysis from
the Australian energy industry subscribe to our fortnightly
newsletter and download the Energy Live app on Apple or Android.