Building a More Resilient World: a New Era for Energy Public Affairs After COVID-19
The impact of COVID-19 will be felt strongly, albeit differently, across geographies and segments of the energy industry. While it is too early to predict post-crisis ramifications beyond the current heightened level of government involvement, companies will undoubtedly face a new set of complex questions.
Before the crisis, FTI Consulting’s Resilience Barometer showed that business leaders believed the power balance between companies and regulators was shifting, with 82% believing that governments and politicians impact the performance of their business or strategic direction of their organisation, second only to customers at 88%. This percentage will undoubtedly increase, as post-crisis recovery leads to new expectations around policy and public affairs engagement.
Energy is critical to modern society and the sector has played a key role during the crisis, powering homes, hospitals, IT systems, logistics, and enabling our digital lives and economies. The global energy system is built to be resilient, with meticulous attention paid to health and safety issues as well as disaster response planning, yet it is facing the biggest shock since the second world war.
The International Energy Agency predicts global demand for energy will fall by 6% in 2020, a decline that is set to affect mainly oil, gas and coal consumption. Renewable energy consumption, however, has risen this year, as less flexible renewable sources get priority access to grids and are therefore less sensitive to demand shocks.
The crisis has nonetheless exacerbated individual and system weaknesses. All energy providers now face risks of supply chain disruption, reduced investment due to uncertain demand, and a lack of incentives and long-term policies to support their business models.