- Aug 13, 2020 9:26 pm GMT
Here are a few highlights from the EIA report; Don't look at this report if you're looking for a silver lining!
Creating energy market forecasts and projections for the short term, medium term, and long term is always a challenging task, and the current events caused by the global response to the COVID-19 pandemic are having broad impacts on macroeconomic activity, in general, and energy markets, in particular, that make creating these forecasts and projections all the more challenging. Some uncertainties are unavoidable in any forecast or projection, but the current environment heightens these uncertainties and creates additional issues that greatly complicate the analytic landscape.
COVID-19 and its mitigation efforts are significantly affecting energy demand in the short term and could continue to do so in the medium and even long term.
This unprecedented volatility in macroeconomic activity and related forecasts is likely to continue.
Further complicating matters is the issue of possible resurgences of the pandemic if a vaccine remains elusive or containment efforts prove inadequate.
EIA assumes U.S. gross domestic product (GDP) will decline by 8.2% in 2020
Macroeconomic variables have large effects on domestic energy consumption in EIA’s energy demand models (Commercial, Residential, Industrial, and Transportation). Some examples of important medium- and long-term variables for energy demand modules include commercial floorspace (Commercial sector); energy intensive sector gross output (Industrial sector); and disposable income, employment, new vehicle sales, and gross output (Transportation sector).
The impact of these factors on business and consumer’s willingness and ability to resume pre-COVID-19 employment, shopping, and travel behaviors will largely determine the potential energy demand impacts.
Resurgence of the pandemic could further erode confidence and begin to permanently change consumption patterns, employment, and travel behavior.
Electricity supply in the short term is highly uncertain because of rapidly changing economic conditions.
the U.S. electric power sector is resilient and will not likely fundamentally change operations in the long term. The pandemic does add another layer of uncertainty and risk, and the lack of information and data make it difficult to understand the impacts of COVID-19 mitigation efforts on power generation in the years to come.
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