Vulnerability of Renewable and Fossil Fuel Energy from COVID 19

COVID-19 has hurt the world economy since its global spread. So various economic sectors, particularly the energy sector, have been impacted negatively. Statistical analysis has been used in numerous research to assess the effects and repercussions of COVID-19 on the energy sector. However, the influence of its interaction with other sectors, such as households and businesses, on the energy sector has not been studied. The DSGE model provides a framework for analyzing the effect of COVID-19 on the energy sector in dealing with households, businesses, government, and central bank policymakers. The energy sector is separated into two parts in this paper: renewable energy and fossil fuel energy. The impact of COVID-19 on consumption, production, investment in renewable energy, and investment in fossil fuels was then studied using the DSGE framework. The results indicated a decline in production and investment in these two sectors, as well as a rise in consumption. The results also indicate that the fossil fuel energy sector has had a greater decline in production, a greater increase in production costs, a greater loss in investment, and a greater increase in consumption than the renewable energy sector.