It’s no revelation that due to Covid the world as we knew has changed. Most people who travelled every day for work or business have stopped commuting. Flights are not flying people around for holidays neither cruises are cruising for leisure. Due to this the major casualty became the oil industry.
As the demand for oil collapsed due to covid the world ran out of places to store it in July 2020.[1] Oil prices went in negative which meant that anyone trying to sell a barrel would have to pay a buyer instead. Because of the continued trend, companies that made fortunes selling it are coming closer to bankruptcy.
Oil industry is dying
Roughly 20 percent of jobs in this industry have already been lost in 2020. [2] And news follow Exxon is making big cuts to its personnel, which could be close to 15% of the global workforce. [3] BP is giving up its core business to convert into clean energy and invests $1.1B in offshore wind.[4]
Shell too said it will cut up to 9,000 jobs about 10% of its workforce as it seeks to transition away from oil and towards renewable energy. [5] All these oil giants are running like headless chicken as they have pledged to bring their net emissions to zero by 2050.
Will oil industry be resurrected?
Some analysts think global demand for oil may never return to its 2019 record high. The pandemic will permanently reshape the way people live and travel. Work from home is going to be pervasive idea to most companies as employees get more used to it.
So what is replacing Oil Industry? The trend seen is that oil industry is been taken over by Clean Energy Sector. What happened to coal is happening to oil right now. Adoption of Electric Vehicles is one of the main reasons it has triggered this change. And the unprecedented pandemic situation has only helped it to speed up.
Mass EV adoption is at a tipping point
An in-depth research conducted by Castrol, ironically an oil lubricant company mentions that mass EV adoption is at a tipping point and majority of consumers would consider buying an electric car by 2024. The study also reveals that some markets are more forward-thinking. Like Indian consumers are eager to buy an EV as near to 2022, closely followed by are Chinese consumers just a year later.
Countries like Norway with heavy government incentives are leading in EV car sales already. They have reached 82% in pure electric cars market share in September 2020. Germany, Spain and other european countries are not far behind. And seems whole world is itching ahead to take Electric vehicles mainstream.
Clean Energy Sector is rising fast
Let me be clear, I love to advocate clean energy and renewable energy as whole. While there is a Climate crisis going on blah blah blah! But what the market trend is showing is that Clean Energy is now finally profitable and taking off at very fast pace. Simply put, in next decade Clean Energy = money.
To normal people, when stats like above are shown or investments in this sector are explained they go “Hmm that’s nice! It’s good for the planet“. But when you elaborate the opportunity that they too can make money out of it, then they get excited!…a bit.
Just by investing upfront for installing Solar panel on the rooftop and a battery like Tesla’s Powerwall connected to house, households can now save upto 75% on their electricity bill.[6] Where such consumers not only can save money but also earn if done right. There is now a term for them “prosumers“
So what’s revolutionising Clean Energy Sector?
Due to efforts put in last decade it’s now possible to reap its advantages. Here are some highlights.
- Affordable Battery Storage
Electricity can now be stored in enormous quantities into big batteries. This wasn’t feasible just few years before. Now every house or community can have a battery retrofitted making them a part of independent Microgrid that saves money. Check out my previous article where I explain in detail why Electricity is the new Oil.
- Cheaper and more efficient Solar Panels
The cost of Solar PV electricity fell 82% from 2010 to 2019. Experts predict that the cost will fall by 17% from 2020 to 2025, and solar PV is expected to be among the cheapest sources of power by 2050. [7] Solar panel aren’t just becoming cheap but since their invention in 1955 where they only converted Solar to Electricity at 2% efficiency are now able to convert at over 20% efficiency.[8] And it’s only improving.
- Bigger and taller Wind turbines
The name of the game in wind energy is: Bigger the better. Bigger wind farms, largest one is in UK with 174 x Siemens SWT-7.0-154 wind turbines of wopping capacity of 1218 MW. And taller wind turbines, not only provides more circumference but also capture consistent high atmospheric winds. Largest so far is GE’s Haliade-X 12MW stands 260 meters is nearly as tall as Eiffel Tower and just one of which is enough to power 16,000 homes.
- Exploration into other renewables
And research and expansion in other renewable sources continues to happen like Hydro, Tidal and Geothermal energy options.
Revolution Electrified’s Take
Covid has come and caused havoc in the world but one of many good things it has done is to force humanity take a pause and think about their daily routine. Technology for Solar, Wind and good old Hydro were there for decades or even centuries but never truly explored as a sustainable path to follow in presence of cheap fossil fuels.
Oil and Automobile companies like BP, Shell, Exxon, VW, GM and Ford had data in hand to see the permanent impact of fossil fuels on the planet. But for short-term gains these and most of the other companies continued to exploit the environment many of its effects like premature deaths will continue to affect lives of many for years to come not just in cities but in countryside too.
Revolution in Clean Energy sector is proving that it was always a no-brainer. People who follow the updates in this sector know it and government is also learning fast. I feel countries who don’t get on-board or are slow to adopt will not only suffer environmentally but financially too. Oil will be an enemy of poor disguised as friend.
