Dark outlook in the power sector by covid-19, analysts estimate

The mere reopening of productive activities will not automatically generate a greater demand for energy. The quarantine will have effects on the payment cycle of the entire chain, which will affect the cash flow of companies in the different energy lines, they warn.

Lower demand, low energy prices, cash position of the companies due to the emergency measures that the government has had to adopt, all these actions affect the Colombian energy sector on behalf of the covid-19 and which were evaluated in the virtual conference convened by the World Energy Council Colombia.

“This type of exercise allows all companies and experts, both in the private and public sectors, to have serious and timely elements of analysis to face the immediate future posed by this contingency, not only in Colombia but in the world,” he said. Daniel Diaz, technical secretary of the Council.

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The event concluded that in the Colombian energy sector, the consequences of COVID-19 are being analyzed in depth and with permanent monitoring, and the measures that have been adopted by the government in terms of payments, rates and aid, in the areas of energy and natural gas.

With concern, it was noted that the levels of the reservoirs, which were on average at 75% in August 2019, may be reaching averages of 31% in recent weeks, historical lows.

It was determined that the falling prices of energy on the stock market may be falling by up to 50%, a factor that is due to the impact of compulsory insulation, resulting in lower demand, especially in the industrial and commercial sector, but not in the residential sector.

It is estimated that in industry demand would be falling by 30% due to confinement and paralysis of the productive apparatus. Just reopening productive activities will not automatically generate higher energy demand, experts admit.

“It would be naive to think that demand is going to behave at normal price levels now with restrictions by covid-19,” they point out. The quarantine will have effects on the payment cycle of the entire chain, which will affect the cash flow of companies in the different energy lines.

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Reports recall that under normal conditions, energy demand in Colombia was in the order of 210 gigawatt hours / day. And right now it has dropped to averages of 170 gigawatts.

The analysis of the energy sector warns that when demand falls, there is a risk that the marketers will not be able to sell their surpluses at the stock market price that they had initially calculated and, therefore, could have negative income.