The Energy Demand Crisis Within the Public Health Crisis

As COVID-19 spreads around the globe, staying at home has become the easiest and most effective way to save lives. Governments across the world have translated this public health measure into policy by enacting “shelter in place” orders, confining millions to their homes. As a result of these orders, residential electricity demand has skyrocketed. If governments fail to guarantee uninterrupted access to essential utilities such as water and energy, people will sustain substantial income loss – earning less money due to a job loss while consuming more electricity that increases their financial burden.

How are governments around the world responding to this looming energy crisis? In a recent paper, Syed Shuibul Qarnain et al. examined steps taken by G20 countries to ensure energy consumption needs are being met during the COVID-19 pandemic.

Qarnain et al. contend that the COVID-19 pandemic has markedly shifted energy demand in the G20 countries. According to the Global Energy Statistical Yearbook, in 2019, G20 countries accounted for 80% of global electricity demand. With roughly an annual 3% increase from 2016, the electricity demand is predicted to exceed forecasted levels of 18,000 TWh in 2020, assuming economic and industrial activity resumes after the onset of the pandemic. Specifically, residential consumption is predicted to keep rising as the pandemic continues. Recent research looked at energy consumption of New York City apartments, and found an increase of 23% during normal working hours in March 2020 (Meinrenken et al. 2020). This pattern is likely repeating in other countries where people are staying at home.

Qarnain et al.’s paper provides a detailed account of the state actions taken by G20 countries to meet increasing electricity demand during COVID-19 lockdowns. While 13 G20 countries have engaged in direct interventions, four countries do not provide direct support and funding towards the electricity sector. However, they have given indirect financial, social, and economic support. The 13 G20 countries that engaged in direct intervention mainly implemented three types of policies: offering a discount or exemption for an electricity bill, requiring utility companies to process deferred payments or issue a moratorium on them, and requiring utility companies to provide non-interrupted services during the pandemic.

Developing Asian countries with large populations tend to offer utility discounts and partial exemptions, the most direct type of financial ease. For instance, Malaysia issued a three-month, 30% discount on utility bills for residents of Sabah, the administrative division most impacted by COVID-19. China has enacted policies to reduce electricity prices across the board for all residents.

Some developed countries are mandating uninterrupted electricity service to all residents, even those who have failed to pay their bills. For instance, in mid-April, the Ontario Energy Board suspended service interruption for all consumers. The United States, United Kingdom, and Argentina, although not technically a “developed country,” have also suspended disconnection for non-payment of electricity bills.

Although Japan, Australia, India, and Germany have neither offered discounts on electricity nor suspended payment requirements, they have offered consumers flexible payment structures, including general deferment.

Qarnain et al. contend that when dealing with public health crises, it is important to not only prepare for an emergency public health response, but also have ready an emergency plan for the energy sector to reduce the economic burdens associated with changing energy demand. They offer policy recommendations for governments to adopt to ensure energy needs are being met; the authors urge authorities to supplement their policies with incentives that encourage energy conservation during a pandemic. Thinking beyond energy, the authors strongly emphasize the use of an interdisciplinary approach to combat a public crisis. More than just a health crisis, the pandemic should be treated as a prompt to reconstruct a society’s ability to respond to a range of contingencies.

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Qarnain, Syed Shuibul, S. Muthuvel, and S. Bathrinath. 2020. “Review on government action plans to reduce energy consumption in buildings amid COVID-19 pandemic outbreak.” Materials Today: Proceedings in press. https://doi.org/10.1016/j.matpr.2020.04.723.