EGEB: COVID-19 will cost oil and gas $1.8T in 2020 globally

EGEB: COVID-19 will cost oil and gas $1.8T in 2020 globally

In today’s Electrek Green Energy Brief (EGEB):

  • A data firm projects the global oil and gas industry will lose $1.8 trillion in revenue this year.
  • As India sets ambitious green energy goals, it sees a firm $6 billion investment in solar.
  • China completes a $3.2 billion, renewable-energy-only, electricity transmission line.

The Electrek Green Energy Brief (EGEB): A daily technical, financial, and political review/analysis of important green energy news.

Oil and gas will lose big

Fitch Group, a data firm, is projecting that oil and gas will lose $1.8 trillion in revenue in 2020 due to the pandemic. Why? Because governments globally are building green energy into their stimulus plans.

Plus, there are other things like oil oversupply and the plummeting costs of renewables, and not even the OPEC-Russia deal is going to make a difference in the long run.

The US currently does not have a green stimulus plan. But if Joe Biden wins the presidential election in November, this inertia on green energy will rapidly disappear, as the Democrats are keen to implement some form of Green New Deal. As Electrek reported earlier this week, the US could deliver 90% clean, net-zero electricity nationwide by 2035, at no extra cost to consumers and without the need for new fossil fuel plants, according to a new study from UC Berkeley.

The Houston Chronicle reports the stats that reflect the decline:

BP is shedding 10,000 workers, mostly in administrative roles. Chevron is eliminating 6,700 jobs. Nationally, 90,000 oil and gas workers have lost their jobs, while in Texas alone, the industry shed 26,300 jobs in April. Those cuts were on top of layoffs in 2015 and 2016.

Fourteen oil and gas companies declared bankruptcy in April and May, compared with five over the same period last year, the law firm Haynes and Boone reported. The corporate bond default rate is up to 12.5%, mostly because of oil companies unable to pay their debts, S&P Global Platts reports.

As the Chronicle‘s Chris Tomlinson writes about Texas, which is No 1 in the US for wind energy (pictured above):

The world’s energy markets have fundamentally changed, and Texas must keep up with the times by developing industries beyond oil and gas.

Solar surge in India

Adani Green Energy is going to develop 8 gigawatts (GW) of solar power over the next few years, helping the Indian government attain the ambitious green energy targets it has set.

AGEL and the Solar Energy Corporation of India (SECI) will set up 2GW of “solar cell and module manufacturing capacity” by 2022, according to CNBC. The other 6GW will follow. The project will cost $6 billion and will create 400,000 direct and indirect jobs.

The Indian government has set a near term goal of 175GW of renewable capacity — the maximum amount that installations can produce — by 2022. CNBC paints the big picture:

The country’s installed capacity at the end of May — for all energy sources — was slightly over 370GW, according to government statistics.

Renewables — listed as small hydro, wind, solar and bio-power — accounted for over 87.3GW of this total.

By contrast, installed coal capacity stood at just over 205GW, a figure which reinforces how much work still needs to be done.

World’s first renewable transmission line

China’s State Grid Corporation commissioned and completed a $3.2 billion, 1,500 km electricity transmission line that will carry only renewable energy. It is the world’s first renewables-only electricity transmission line.

The transmission line is intended to help increase the use of wind and solar in the relatively remote provinces of Qinghai and Gansu. The State Grid currently has about 40GW of wind and solar generation in those provinces.

The line will be put into full operation in December. It will be able to handle 40 billion kWh a year.

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