By Michael Tobias: NY-Engineers.com
The unprecedented health emergency sparked by the current coronavirus pandemic has caused an economic crisis that has impacted on employment and investment in a way that most people would never imagined. All parts of the global economy are affected, some more than others, and some will be more difficult to resurrect than others.
As governments worldwide take steps to provide urgent economic and financial relief and work on plans that will initiate a resilient recovery from the disease that will be sustainable, the International Energy Agency (IEA) has formulated a recovery plan designed to keep 2030 and 2050 net-zero energy goals on track. The plan has three primary goals that focus on job creation, boosting global economic growth, and creating cleaner energy systems that are sustainable.
The IEA’s Sustainable Recovery Plan Focuses on Energy
Intended to guide governments on boosting economic growth, creating millions of new jobs, and forcing the decline of greenhouse gas emissions, the IEA’s recovery plan, Sustainable Recovery, has been published in the form of a World Energy Outlook Special Report. Produced in collaboration with the International Monetary Fund (IMF), it provides those trying hard to produce achievable stimulus packages with clear advice on ways to deal with the major economic, energy, and climate change challenges that we face as nations and communities.
A vital focus of the IEA’s sustainable recovery plan is on accelerating the utilization of modern, reliable, clean-energy infrastructure and innovative technologies, some of which are not even in the prototype stage yet. This will involve a wide range of specialists in numerous fields, from engineers that focus on HVAC engineering services and ventilation systems to researchers, seasoned analysts, and financial experts.
Aware of the tremendous shock to global energy caused by the coronavirus crisis, and the predictions that global energy investments are likely to decrease by around 20% during 2020, analysts assessed the impact made on all major fuels, including fossils fuels: coal, gas, oil, electricity, and various renewable options. After quantifying these, they identified the most effective steps governments could take to build cleaner energy systems that are more secure and sustainable as part of their national recovery plans. At the same time, these steps will ensure that greenhouse gases globally will decline more rapidly.
Ultimately, the IEA/IMF plan has been designed to try and avoid the radical rebound in carbon emissions like the one experienced after the global financial crisis just more than a decade ago, in 2008-2009. Even though the COVID-19 crisis has resulted in decreased emissions, as industry recharges, they will certainly rise, just as they have already begun to do in China.
The million dollar question is how we can prevent air pollution from rising to and even exceeding pre-COVID-19 levels.
Lessons Learned From 2008/2009
Even though the economic crisis of 2008/2009 is different from the economic crisis caused by COVID-19, there are lessons that we can learn from it, particularly in terms of the recovery measures taken. Now known as the Great Recession, it has been regarded, until now, as the most severe economic meltdown since the Great Depression in the 1930s, between the two World Wars. Initially triggered by the US housing bubble that burst in the mid-2000s, it incorporated a financial, automotive, and energy crisis that was felt in many parts of the world.
Ironically, even though investment in clean energy after the Great Recession contributed to the growth of solar photovoltaic (PV) and wind technologies, and helped to make electricity and gas networks more resilient, in general terms, the recovery was carbon-intensive. Greenhouse gas emissions declined during the crisis, just as they have this year, but had rebounded quite dramatically by 2010.
The Role of Sustainable, Clean Energy in the Recovery From COVID-19
Despite these lessons learned, energy hasn’t been a prominent feature of the COVID-19 recovery packages that were proposed by various governments before the release of the IEA’s sustainable recovery plan. It is an urgent mission of the IEA to change this situation.
But there will need to be substantial innovative research and innovation if the sustainable recovery plan is to work fully.
In a compelling analysis, the IEA and IMF show that following policies and investment details in the Sustainable Recovery report, that are in line with the three-year plan (2021-2023), will boost and sustain substantial employment opportunities. At the same time, they will be providing reliable energy that will be affordable to all and will make energy systems significantly more resilient. It shows that investing in clean energy can generate indirect economic advantages together with benefits that extend way beyond the power and energy sectors.
While the authors of the Sustainable Recovery report concede that in some ways COVID-19 might have a negative effect on attempts to create cleaner, more sustainable energy economies, their conviction is that there are many ways in which it has the potential to boost energy resilience.
- The energy sector has tremendous potential in terms of employment opportunities, particularly those that are labor-intensive. Even those that don’t offer that many jobs can play an important role.
- Because COVID-19 has led to banks lowering interest rates internationally, the costs of capital investment are lower. This improves the viability of large-scale infrastructure projects that are capital intensive. The biggest challenge will be for developing countries that have limited borrowing capacity in international markets.
- The drop in fossil fuel prices is potentially a big positive, even though this might seem ironic. For instance, the oil price is currently extremely volatile because of the big drop in demand for oil. The price of natural gas has also fallen, which is seen as beneficial in terms of the economics required to switch from coal to gas.
- Air pollution is a huge threat to our health and it has been identified as a probable contributory factor to increased COVID-19-related deaths. Significant improvements in air quality during the lockdown, particularly in cities, has increased the general awareness of just how beneficial clean, secure energy is. More than 4 billion people have experienced some sort of lockdown during the pandemic, with many working from home, which has also drawn attention to the vital need for reliable and affordable electricity supplies. This way of life (or rather work) could become the norm for many, which could help to maintain a reduction in air pollution in cities.
Additionally, there is a growing awareness of the need to ensure that the air quality in our buildings is of high quality and that there are minimal, if any, risks that COVID-19 might spread through ventilation and HVAC systems. For this reason, building air quality checks have become a priority.
The Need for Innovative Research into Clean Energy
There is no convincing argument against the fact that urgent and intense innovative research into clean energy must become a global priority.
Investment in wind and solar PV during the 2008/2009 financial crisis led to declining costs in these forms of clean energy. In the US, the same applied to lithium-ion batteries and battery storage systems as well as electric cars. But the oil price crash that followed, together with predominant market conditions, impacted on other forms of clean energy including hydrogen and advanced biofuels, which didn’t increase in capacity.
- The production of biofuels is an enormously labor-intensive industry and, after solar PV, the largest source of renewable energy jobs. The challenge is to build a more advanced and extensive biofuel industry, and that is going to take highly-skilled research and development (R&D).
- Hydrogen is a versatile carrier of energy and it can be produced from low-carbon as well as fossil fuel sources. There are opportunities for clean hydrogen production and a big need for research funding.
The need to modernize and expand smart electric grids and digital infrastructure also needs substantial investment. Millions of people worldwide lack access to electricity, so this really is a vital need.
Even though innovative research and the development of new technologies will not be likely to create large numbers of jobs or result in majorly expanded economic activity in the short term, the long term projections are promising. Amongst other things, it could lead to new industries developing as well as increased R&D, together with market incentives that could scale up manufacturing capacity.
If the IEA sustainable recovery plan is followed, the forecast is that about $45 billion will be spent annually during the three-year timeframe, accelerating new projects and increasing industrial capacity for new, promising, clean-energy technologies including batteries, hydrogen, small modular nuclear reactors, and carbon capture, utilization and storage (CCUS).
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Author Bio:
Michael Tobias is the founder and principal of Nearby Engineers and New York Engineers, an Inc 5000 Fastest Growing Company in America. He leads a team of more than 30 mechanical, electrical, plumbing, and fire protection engineers from the company headquarters in New York City, and has led numerous projects in New York, New Jersey, Chicago, Pennsylvania, Connecticut, Florida, Maryland, and California, as well as Singapore and Malaysia. He specializes in sustainable building technology and is a member of the U.S. Green Building Council.