The spread of the Coronavirus (COVID-19) has led the countries of the region to implement different economic and social measures to reduce its impact. The uncertainty caused by the lack of a vaccine, the fast spread of the virus, or the uncertain time it may take to return to a normal routine causes more concern.
The immediate priority of governments is to guarantee health but also measures that secure access to public services. As the number of confirmed cases of COVID-19 grows and the closing of leisure amenities and online work being advised by governments, millions of jobs are also being lost worldwide.
This has also led governments to implement short-term measures in the energy sector. In countries like France, the government suspended the payment of electrical services. Whereas, in the United Kingdom, gas and electricity companies joined the Government in guaranteeing services to the most vulnerable citizens of the country.
The measures implemented, as best practices, are concentrated in three large groups:
a) Guarantee the occupational safety of workers for the operation and maintenance of companies in the electricity sector
In Europe, many countries are taking steps to ensure operation and maintenance. For example, in Germany they are building shelters to have additional work shifts at generation plants, especially nuclear ones.
Electricity companies are among the 16 industries labeled “critical infrastructure sectors” by the US Department of Homeland Security, which causes to have a higher level of cooperation and scrutiny of government agencies in charge of public security.
The US electrical industry is considering asking essential personnel to live on-site, in power plants and control centers, to keep operations running if the coronavirus outbreak worsens. The industry has also been storing beds, blankets, and food for their staff.
b) Establish mechanisms to support the affordability of energy services
The large electricity companies in Spain have already decided that they are not going to cut the power to their customers, despite the fact that the Government has only prohibited the cut for vulnerable consumers, with which the potential nonpayment would entail a loss of profits in the short term. This implies an impact on the liquidity of the companies and their vulnerability to not cover the costs of supply.
Another country that has taken measures in this regard is France, which has announced that the state will assume the cost of non-payment of basic services. The payment of taxes and social security, water, electricity and gas bills, as well as rents, will also be suspended.
c) Set a strategy to guarantee the economic sustainability of the sector
The financial strain to which electricity companies are subjected can be extreme for small traders, many of which cannot long endure a general reduction in profits. This situation is particularly complex for marketers whose customer base has a high composition of SMEs. Portugal has already anticipated this situation and has decreed that marketing companies can delay payment to distributors while the emergency situation continues, in order to face the health pandemic.
The French president announced that 300,000 million euros will be allocated to save companies. The State will assume the payment of the contracted bank credits.
Some countries in Latin America and the Caribbean have begun to implement some of these measures, perhaps isolated, but with the aim of guaranteeing access to electrical energy for their citizens. In particular, the IDB is supporting different actions with resources and technical assistance with up to US $ 12,000 million destined for the crisis and its consequences. Undoubtedly, ensuring electricity services will be necessary to keep the light on in the region.