The current dual crises of oil and Covid-19 have thrown the future of renewables in to doubt
Rejoice, climate change activists. Around the world, greenhouse gas emissions are dropping.
The demand for energy, until recently the cornerstone of globalisation and economic growth, has plummeted as countries implement sharp restrictions on movement and social activity in an effort to beat back Covid-19.
Oil has crashed in value, approaching levels not seen in decades, as lockdowns put economies on hold the world over.
Even before oil was engulfed in its latest crisis, it was already facing an existential threat from new forms of renewable energy.
Fossil fuel use hit a record low in the UK last year, as the country increasingly opts for cleaner energy in a bid to rid itself of a reliance on oil, gas and coal by 2050.
Power from hydroelectric plants, or wind and solar farms has never been cheaper or more abundant.
So you might be forgiven for thinking that this most recent crash represents the final nail in the coffin for oil. But not so soon, say experts.
“Low oil and gas prices will place pressure on the economics of renewable energy sources and, without policy support, some renewables that have seen rapid deployment will have to wait for credit markets to recover, ceding ground to cheap hydrocarbons and fossil fuels,” says Reed Blakemore, deputy director of the Global Energy Center at the Atlantic Council.
The double whammy of Covid-19 smashing world economies and public budgets is also likely to harm the prospects of renewable energy.