Click on any media channel and the topic is corona virus. So why should we be different? We wondered if the virus could have some impact on energy. Here are some thoughts.
As the virus spreads its affect is questionable as experts are really just gathering data. China and some general economic concepts do provide lessons in several ways.
Lower oil and gas prices: If economic activity is slowed down then oil and natural gas prices would likely go down, too. “Oil demand is set to contract in 2020 as the corona virus outbreak widened to 72 countries.” (Source) That can eventually show up at the corner gasoline station. That could show up in some lower home heating bills.
Less growth in renewables: “Many of the world’s largest solar, battery, and wind manufacturers produce in China. The Chinese government has restricted domestic travel and briefly halted all manufacturing in eight provinces, including those that major clean energy manufacturers call home.” (Source)
Prices could go up on some renewable energy hardware, though right now “the impact on the United States’ power sector is mixed.” (Source)
This is a heads-up on a lesson about supply chain diversity that you can bet is a topic in companies everywhere.
Fewer emissions: The economic slowdown in China significantly reduced emissions. “China’s industrial power demand in 2020 may decline by as much as 73 billion kilowatt hours (kWh) … as the outbreak of the corona virus has curtailed factory output.” (Source)
That could translate to fewer emissions in other countries that have reduced economic activity.
Can it affect how your power company operates? The virus may be a wash if it spreads. “We think that utilities are less vulnerable to a corona virus outbreak. Lower commercial and industrial loads could be offset by higher residential loads if people start staying home,” said investor site Morningstar.