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IEA Report Warns Global Energy Demand
Will Plummet due to COVID Crisis

The International Energy Agency (IEA) has made a striking forecast of a 6% drop in worldwide energy consumption, according to its newly-released Global Energy Review for 2020.

Changes to electricity use during COVID-19 lockdowns have resulted in significant declines in overall electricity demand, with consumption levels and patterns on weekdays looking like those of a pre-crisis Sunday. Full lockdowns have pushed down electricity demand by 20% or more, with lesser impacts from partial lockdowns. Electricity demand is set to decline by 5% in 2020, the largest drop since the Great Depression in the 1930s.

The report also expects natural gas consumption to fall by 5%, which is the largest reduction on record since it became a major fuel during the last century.

This decline is unprecedented. It is the equivalent of losing the entire energy demand of India, which is the world's third-biggest consumer of energy.

“This is a historic shock to the entire energy world. Amid today’s unparalleled health and economic crises, the plunge in demand for nearly all major fuels is staggering, especially for coal, oil and gas,” said Dr Fatih Birol (pictured), the IEA Executive Director. “Only renewables are holding up during the previously unheard-of slump in electricity use. It is still too early to determine the longer-term impacts, but the energy industry that emerges from this crisis will be significantly different from the one that came before.”

Advanced economies are expected to see the biggest declines, with demand set to fall by 9% in the United States and by 11% in the European Union. The impact of the crisis on energy demand is heavily dependent on the duration and stringency of measures to curb the spread of the virus. For instance, the IEA found that each month of worldwide lockdown at the levels seen in early April reduces annual global energy demand by about 1.5%.

 

Renewables Show Their Resilience

 

Renewables are proving resilient to the crisis. Lockdown measures are driving a major shift towards low-carbon sources of electricity including wind, solar PV, hydropower and nuclear. After overtaking coal for the first time ever in 2019, low-carbon sources are set to extend their lead this year to reach 40% of global electricity generation – 6% in front of coal. Electricity generation from wind and solar PV continues to increase in 2020, lifted by new projects that were completed in 2019 and early 2020.

This trend is affecting demand for electricity from coal and natural gas, which are finding themselves increasingly squeezed between low overall power demand and increasing output from renewables. As a result, the combined share of gas and coal in the global power mix is set to drop by 3 percentage points in 2020 to a level not seen since 2001.

Coal is particularly hard hit, with global demand projected to fall by 8% in 2020, the largest decline since the Second World War. Following its 2018 peak, coal-fired power generation is set to fall by more than 10% this year.

Global energy-related CO2 emissions are set to fall nearly 8% in 2020 to their lowest level in a decade. Reduced coal use contributes a significant amount to this. Unfortunately, when the crisis is over, it is likely that a large rebound could happen.

“This crisis has underlined the deep reliance of modern societies on reliable electricity supplies for supporting healthcare systems, businesses and the basic amenities of daily life,” said Dr Birol. “But nobody should take any of this for granted – greater investments and smarter policies are needed to keep electricity supplies secure.”

 

Renewable Electricity Generation to Rise by 5%

 

The IEA estimates that total global use of renewable energy will rise by about 1% in 2020.

Despite supply chain disruptions that have paused or delayed activity in several key regions, the expansion of solar, wind and hydro power is expected to help renewable electricity generation to rise by nearly 5% in 2020. This growth is smaller than anticipated before the COVID-19 crisis, however. A faster recovery would have a minimal impact on renewable energy production, though it would enable more new renewables-based projects to be completed. If recovery is slower, renewable energy would still increase, making renewables the energy source which is likely to be most resilient to the current crisis. Undoubtedly there will be other pandemics, so this shows yet another area where renewables outperform fossil fuels.

“Resulting from premature deaths and economic trauma around the world, the historic decline in global emissions is absolutely nothing to cheer,” said Dr Birol. “And if the aftermath of the 2008 financial crisis is anything to go by, we are likely to soon see a sharp rebound in emissions as economic conditions improve. But governments can learn from that experience by putting clean energy technologies – renewables, efficiency, batteries, hydrogen and carbon capture – at the heart of their plans for economic recovery. Investing in those areas can create jobs, make economies more competitive and steer the world towards a more resilient and cleaner energy future.”

 IEA Global Energy Review 2020

 

The US offshore wind market is probably the most rapidly-developing renewable energy sector in the world.

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By Julian Jackson – writer on technology, arts, blockchain and cryptocurrencies


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