How pandemics affect the energy industry

Much of the South African economy is on some level of lockdown, with citizens and businesses in the country all forced to curtail their usual habits, stay inside and wait until the coronavirus pandemic is under some sort of control.

No one knows quite how long these measures could be in place, of course, but in the meantime, the sudden downturn in economic activity that has plunged much of South-Africa and the rest of the world into a near-immediate recession already has had a dramatic impact on electricity use, with potentially significant ramifications for long-term decarbonisation efforts, the wider green economy and the renewables sector, in particular.

"In most economies that have taken strong confinement measures in response to the coronavirus — and for which we have available data — electricity demand has declined by around 15 percent, largely as a result of factories and businesses halting operations," Fatih Birol, executive director of the International Energy Association (IEA), wrote in a blog post Sunday.

He explained that in some regions with high shares of wind and solar generation, if demand declines and weather conditions continue as expected, it potentially offers an opportunity for renewables to take up an even higher share of generation than usual.

Elsewhere, however, weaker electricity demand means power generation capacity is abundant, which presents significant challenges for how to operate baseload power — in the form of both fossil fuels and nuclear — while managing fluctuating renewables generation on the grid.

"This is an important moment for our understanding of cleaner electricity systems, including some of the operational challenges that policymakers and regulators need to address to ensure electricity security," Birol said.