Global energy is our most important asset in the world. The impacts of the Covid-19 pandemic are becoming clearer as we approach the end of this year. The worldwide economic shock caused by the pandemic is both widespread and causing dramatic shifts in the energy sector. Although investments within the energy sector have decreased, research has shown some sectors will rise in the future.
As you can from the IEA’s research done about Energy Investment, there is no denying that there has been a massive fall in energy investment. This can be explained by workers being made to work from home, companies reducing their spending, or even supply chains being interrupted. We can observe a decrease of 20% between 2019 and 2020 which equals to a reduction of USD 371 Billion in investments.
From that 20% decrease of investments, we can see how oil was heavily affected by the pandemic with a decrease of USD 244 Billion. This is due to lower energy demand and prices as well renewable energies becoming more prevalent and focused on. The IEA estimates that oil spending will drop by more than USD 1000 Billion within 2020 and that electricity might rise up to become the most consumed energy.
Global Energy Outlook
Last month Total released their energy outlook until the mid of the century and they claim that renewable energy will grow and occupy a critical role in the future. Oil demand will plateau around 2030 and then decline due to energy needs changing and renewables becoming more efficient. BP has also performed their own research that mentions “the share of renewables in the energy mix increases significantly” under any scenario in the future.
The energy sector will continue on to decline for some time. But you should not miss out on the chance to focus your attention on renewable energies. Renewables will continue to grow from 2020 onwards and will clearly be a safe investment opportunity. We here at PMO Partners will be providing updates and news about many various sectors and finding energy projects for our clients to join.
Sources:
- IEA (2020), World Energy Investment 2020, IEA, Paris
- Total (2020), Total Energy Outlook 2020, Total, Paris
- BP (2020), Energy Outlook 2020, BP, London