European responses to contain the coronavirus accelerate the electricity system transition by a decade, Wärtsilä analysis finds. Coal generation collapsed by almost one third in the four weeks prior to April 10 while renewables contributed half of the reduced EU electricity demand, down by on tenth due to the lockdowns.
As the U.S. has become the epicentre of the coronavirus pandemic, grid operators have seen not only reduced weekday electricity demand relative to expectations for this time of year and current weather but also changes in daily electricity usage profiles. The morning peak, for example, is now later and with a more gradual ramp.
Debt financiers of U.S. fracking firms are preparing to directly manage distressed energy assets to avoid debt write-offs in the event of bankruptcies. Bank of America, Citigroup, JP Morgan Chase and Wells Bank are understood to set up holding companies for distressed oil and gas producers as the industry owes over $200 billion to lenders.
OPEC producers and Russia, supported by the U.S. and Mexico, have agreed to cut output by about 10%, or 9.7 million barrels per day, after demand slumped due to coronavirus lockdowns. Though oil prices did not jump in early trading in Asia today, Wood Mackenzie says the supply cuts will lift oil and gas prices “significantly” starting from the second quarter.
Though China’s economy and gas demand is picking up, the coronavirus pandemic chocked energy consumption elsewhere. Delivered gas prices into Northeast Asia today fell below $2.40/MMBtu, hence Wood Mackenzie warns spot LNG prices in Asia might soon drop below breakeven costs of U.S. upstream companies, causing production shut-ins.