Covid-19 Executive Briefing

Understanding the economic impact of the Covid-19 pandemic and the implications for the power sector

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- ECONOMIC IMPACT -

Latest update: 30 June

Many economists have cut their GDP forecasts. The 2020 consensus forecast for GDP growth is currently negative and many predict a recession.

Concern over the spread of Covid-19 is trending downwards, while business optimism is trending upwards.

-4.9%

The IMF predicts global growth will decline by 4.9% in 2020, down 1.9% from its April forecast.

13-32%

The World Economic Forum believes de-globalisation will occur post-Covid-19. World trade is expected to contract between 13% and 32% in 2020.

Impact of Covid-19 on asset prices

- SECTOR IMPACT: Power -

Latest update: 1 July 

GlobalData analyst view:

"Several under-construction projects are experiencing delays due to supply chain disruption and manpower shortage."

Global power generation was 2.6% lower in Q1 2020 than Q1 2019.

Renewables-based generation increased by 3%, mainly because of a double-digit percentage increase for wind power and a jump in solar output from new projects over the past year.

Coal-fired generation was squeezed from all sides, and output fell by 8% in Q1 2020 relative to Q1 2019.

supply chain and demand disruption

In the UK, the 7GW offshore wind leasing Round 4 has been revised to give the interested parties more time to respond.

Low-carbon’s share of generation is expected to surge to 40% in 2020, the highest on record, partly because total generation will fall ~5%.

Japan is turning to coal and gas for baseload power generation as solar projects are getting delayed due to Covid-19 and demand remains depressed.

The IEA forecasts a 5% reduction in total power  demand in 2020.

Brazil's Energy Ministry has unconditionally postponed generation and transmission project auctions, planned for May 2020.

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