COVID-19 has opened new doors for the power sector

COVID-19 has opened new doors for the power sector

They say every cloud has a silver lining. For the ongoing pandemic, the silver lining has reached Southeast Asia’s power sector, both in terms of the work environment and the energy transition, suggests Narsingh Chaudhary, Executive Vice President and Managing Director for Asian Power Business at Black & Veatch. We had the pleasure to sit down with Chaudhary back in July to discuss COVID-19’s short- and mid-term impact on the regional power sector.

An unexplored arrangement for the power sector, remote working has suddenly become the new norm in operations. Prior to the pandemic, everyday operations, from training to staff on-boarding, were conducted in the office, engineers needed to physically visit the plants and people travelled around the world in order to attend meetings.

It has convinced us of the power of working remotely, that projects can still continue and that we can still support our customers through technology.

Narsingh Chaudhary

The pandemic has changed our mindset, says Chaudhary. “It has convinced us of the power of working remotely, that projects can still continue and that we can still support our customers through technology.” Video conferencing platforms allow field advisors and engineers to efficiently manage a site despite being in different locations, both onsite or offsite. Virtual training has also allowed companies to protect their team’s safety while pursuing learning opportunities. All these open a new dimension, Chaudhary highlights, wherein there can be a certain percentage of the workforce that has the flexibility of working remotely, even once this pandemic has passed, signalling a fundamental change in the attitude of companies globally.

Despite the myriad ways in which the ongoing crisis has impacted the world, confidence in Southeast Asia’s energy transition does not seem to waver. COVID-19 has shown that “we need power to be able to give good and fast healthcare whenever such a pandemic breaks out,” Chaudhary understands, and yet, Asia still has close to a billion people who do not have access to it. As such, Chaudhary believes that governments will be under tremendous pressure to urgently address this electrification problem. Currently, the odds are in renewables’ favour, with most corporations and governments slowly phasing out coal, thereby, opening a lot of opportunities for renewable energy.

Still, a little nudge is needed for the energy transition to be realised. In Asia, there is a lot to be changed in terms of the investment space. Government regulations, incentives, and approvals are the primary concerns of investors and financiers, Chaudhary outlines. Should governments take appropriate action to make their respective countries more conducive for investments, the region’s shift to renewables will be accelerated. After all, renewable investments can go from small- to mid-scale as compared to the conventional generation which requires large capital.

The sector is looking at a few other impacts in the next couple of years or so. State utilities, for one, have turned their attention to supporting their governments, therefore, giving new projects and CAPEX expansion a lower priority. However, this is good news for independent power producers that now get to play a bigger role with support and incentive from the government, Chaudhary says. There is also the increasing dependence on technology that is further emphasised by the pandemic, prompting the sector to troubleshoot operations without compromising workforce safety.

On the demand side, Chaudhary perceives a shrinking of investment in the next two years but the demand will remain, therefore, new projects are still in the pipeline. This will further pent up, he says, in the mid-term, “with respect to GDP growth and people’s aspirations.” In addition, Black & Veatch is positioning itself to support the sector whenever new solutions are adopted by the market. Chaudhary sees a huge potential for microgrids to give power reliability to address the issue of powering Southeast Asia’s remotest areas.

Now ten months since the onset of the pandemic, we hope that this optimism will continue and we’ll see significant developments in the journey to a lower carbon future for ASEAN.

Visit Enlit Asia’s Expert Insights Series, Episode 7, to listen to the full recording of this interview.

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