Coronavirus and possible scenarios for the global energy sector according to Frede Blaabjerg
Frede Blaabjerg, the 2019 Global Energy Prize laureate, Head of Center of reliable power electronics, Aalborg University (Denmark).
The worst case scenario is recession – eg like we saw at the latest economical crises, which will put the oil industry into a negative loop and keep the prices very low – seen from society perspective the energy as such will be cheaper so households will get cheaper gasoline and so on. Such crisis take a long time to recover from – as it has been seen from previous cases.
The best case is that the world fast recover from the uncertainty of the Corona Virus, some months are passing where the impact of the virus is reduced by governmental means and the world economy will ramp up again in the autumn – at the same time a vaccine is developed for the next years to come. In such case there could be an extra demand for oil as the demand could be higher than normal.
Russia is quite dependent on the income from the oil so it is of interest to keep the price at a certain level – I think this is the scenario that it will stabilize, when an end can be seen uncertainties. But the next months can be a challenge as countries are ramping down in activities and almost closing societies with the results less energy is used. I think it is wise to adjust production short term – also in order to save the oil for use later.
In terms of investment in alternative generation – I think despite low oil prices – this will continue to be developed – many countries have decided to invest and they are more long term to reduce carbon emission. The electrification of transportation will also continue with strong pace.