Is Covid Speeding up Latin America’s Energy Transition?
Oil majors including Shell and BP recently announced plans to write off as much as $22 billion and $17.5 billion worth of assets, respectively, after slashing their long-term price assumptions for oil and gas to reflect the effects of the Covid-19 pandemic. Additionally, BP said it expects the health crisis to accelerate the shift away from fossil fuels. Will the health crisis indeed speed up the energy transition—and if so, why and by how much? In what ways is the pandemic changing oil consumption patterns? Which Latin American countries will be most affected by such a shift, and what can they do now to prepare for the future?
Andrés Chambouleyron, managing director of Berkeley Research Group and nonresident fellow at the Institute of the Americas: “The health crisis has reduced the demand for both hydrocarbons and electricity, but the reduction has been steeper for the former. This is mainly because confinement has caused a sharper fall in the consumption of fuels due to lower demand for both public (fear of contagion) and private transportation (more teleworking and more online shopping) than in electricity (more teleworking and more online shopping!), a reduction that will probably have a permanent component. This steeper decline in the demand for fuels has led to a reduction in oil and natural gas prices that has not been matched by a corresponding reduction in electricity prices. This change in relative prices will probably hit investment in renewables, favoring thermal generation. Renewable sources are located away from consumption centers because they need to be where the primary resource is and because they require larger surfaces of land than conventional thermal generation. Consequently…”Read More
Atlas Renewable Plans Solar Park in Antofagasta
Trinidad and Tobago Cuts O&G Price Assumptions
Complete editions of the Energy Advisor are delivered weekly to members of the Dialogue's Corporate Program and other subscribers. Sign up below for a free complimentary preview subscription.
About the Energy Advisor
A sister publication of the Inter-American Dialogue’s daily Latin America Advisor, the weekly Energy Advisor captures fresh analysis from business leaders and government officials on the most important developments in oil and gas, biofuels, the power sector, renewable energies, new technologies, and the policy debates shaping the future of energy in the Western Hemisphere. To subscribe or for more information, contact Erik Brand, publisher of the Advisor, at email@example.com.