Has Corona Virus formed a worldwide change to cheaper, more sustainable renewable energy?
Corona virus has given us a glimpse of a green future, now environmental economic recovery is the most effective way to cushion the shock of the coronavirus pandemic. Many investors, politicians and businesses see a unique opportunity to drive a shift to a low-carbon future. Coal had a drastic drop in usage last year. Buyers paid producers as much as $37 per barrel of crude oil in April. The price of plastics has fallen by half over the last four years. The fossil fuel economy has become unstable and has started to see a decline in demand.
Gas was once labelled the middle ground from “dirty” fossil fuels to renewable energy, has been hit the hardest. It’s safe to say, that we can all agree it forms part of the fossil fuel group rather than the beginning of the renewable, clean energy era. Liquified nature gas prices have seen incremental declines for over 10 years. It’s more cost efficient to burn $750 million worth of gas than to try selling it. Also, the company that pioneered gas fracking, Chesapeake Energy Corp, is preparing for insolvency.
The coronavirus pandemic, which is expected to shave £300 Billion from the UK economy this year alone, has tossed the troubles of the energy industry into high relief, forcing companies and investors to face reality and turn toward renewables. But this year renewable energy has got serious. In may, a record-low solar tariff of $13.50 per megawatt-hour (MWh) was awarded in Abu Dhabi, which is 13 percent below the previous global record; the New Mexico Public Regulation Commission approved 100 megawatts of solar generation and 50 megawatts of dispatchable battery storage for $30 per MWh; California awarded seven projects totalling 770MW of battery storage. Another two mega-renewable hydrogen projects worth a total of $5 billion were reported in China. In June, Florida, Arizona and Colarado revealed plans to close coal-fire planets and replace them with renewable alternatives. These are just few of the renewable energy stories emerged from the pandemic.
It is anticipated that this will be one of the worst economic downturns since the Great Depression, it is unlikely this demand will see any form of increase for the ‘dirty fossil’ fuel industry. This declining demand means lower prices, and lower prices means less profits. Renewables also are more likely to benefit from federal policy and encouragement. In America, clean energy is likely to see $90 billion investment and tax incentives. Even without federal assistance, investors are likely to continue pour cash into renewable energy projects; the renewables industry is now seen as a stable and safe investment opportunity. Investors begin to drop out the fossil fuel game, as uncertainty troubles the sector.
Corona virus, which is ravaging public health and economies, is not the direct cause of the fossil fuel decline, but it has shown a more sustainable future with cleaner air, reduction in emissions and less waste. Pollution control and climate mitigation policies have seen recent acceleration. The pandemic has left a vast imprint on the world, but will we build back better?
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