Get ready for a virus-driven change in energy use | RenewEconomy

Get ready for a virus-driven change in energy use

What happens beyond the immediate crisis will depend on how governments, business and households react. Here are some possibilities.

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Photo by Kate Trifo on Unsplash

As the response to Covid-19 becomes the ‘new normal’, lots of people are predicting what will happen beyond the immediate crisis. The obvious answer is ‘it depends’.

It depends on how governments, business and households react. The reality is there will be powerful competing forces.

Big industry, led by the resources and fossil fuel industries, will focus on manipulating the federal government.

State governments will be focused on ‘keeping the lights on’ and managing the number of deaths, as the national government will be keen to blame states for any shortcomings in their responses.

But households, small businesses and disruptive businesses will make their own decisions. Many subtle factors will influence them.

How will they integrate the experiences of massive bushfires, slow wages growth, Covid-19, their employers’ behaviour, their concerns about their kids’ futures and coping in the short term as some employers bend over backwards to help their staff while others take the opportunity to exploit them?

The economy will not bounce back to how it was. Some businesses will not recover from the setbacks, while others will capture new opportunities, and some will exploit the situation. Many people’s conception of their future will be changed.

I can’t predict the future, but here are some possibilities.

Transport may be transformed. Many people and businesses are discovering that they don’t need to travel as much as they used to. Virtual work, meetings and socialising can work surprisingly well.

Bike sales have boomed. The emergence of micro- mobility options including e-bikes and e-scooters will mean many households can sell their second car and save a lot of money.

Lightweight, foldable personal e-scooters could allow people to better integrate personal and public transport, because they can take them on buses and trams, as well as trains.

Governments may grab this opportunity to restructure taxation of vehicles from excise on petrol and large fixed registration/insurance charges to road use and congestion pricing, to maintain revenue as people shift to electric vehicles.

‘Virtual’ travel will also offer opportunities to save time and reduce dependence on owning and using so many cars.

International tourist air travel will be limited to trusted countries, while businesses will use more ‘virtual’ travel over the internet. Many businesspeople will appreciate less travel, preferring more time with family and friends.

We are conducting an interesting experiment with energy use. Many businesses will be surprised at how big their energy bills are, despite being in shutdown.

A lot of energy is wasted by equipment that runs continuously or is inefficient when running at part load. Maybe some businesses will now focus on cutting this waste—or not.

Many households will see the impact of higher occupancy on their bills. This may be surprisingly large or small, depending on many factors.

Emerging data analytics services being offered by some energy retailers and service providers could help them to understand what’s going on, and potentially do something about it—or not.

Manufacturing will be more focused on adaptable, flexible and smart process equipment.

A factory that can switch to producing essential products and equipment and is not dependent on inputs sourced from overseas will remain profitable, maybe even more profitable. Digitalisation and modular and distributed technologies will be winners.

Capacity to turn local resources into products, a key feature of circular economies and industrial ecosystems, and to adapt to using different inputs such as recycled materials will provide resilience.

In the electricity and gas industries vicious battles between incumbents and disruptive competitors are likely.

Fundamentals may play out. First, improving energy efficiency is cheapest and delivers valuable multiple benefits such as productivity, resilience and quality of life. Second, renewable energy combined with energy storage and smart energy management should swamp coal and fossil gas.

Third, existing incumbent energy retailers, network operators and generators may battle among themselves, trying to find viable business models.

Energy policy makers, swamped by lobbyists, may struggle to respond to the conflicting pressures applied to them.

The energy sector may realise that no one really wants their products: they want services that involve some energy use and will happily adopt alternatives if they work well.

The importance of the energy sector is not a fundamental: it is an outcome of past decisions that created a fragile, centralised energy system that seemed like a good idea at the time.

Alan Pears is a senior industry fellow at RMIT University, advises a number of industry and community organisations and works as a consultant.This article was originally published on Renew Magazine. Reproduced with permission of the author.

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