The International Energy Agency (IEA) has predicted that the current pandemic represents the biggest shock to the global energy system since the Second World War, and will result in a record annual decline in carbon emissions of almost 8 per cent.

A new report provides an almost real-time view of the pandemic’s extraordinary impact across all major fuels. Based on an analysis of more than 100 days of real data so far this year, the IEA’s Global Energy Review projects that energy demand will fall 6 per cent in 2020 – seven times the decline after the 2008 global financial crisis. In absolute terms, the decline is unprecedented – the equivalent of losing the entire energy demand of India, the world’s third largest energy consumer.

“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. Only renewables are holding up during the previously unheard-of slump in electricity use,” said Dr Fatih Birol, the IEA executive director. “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 per cent in the US and by 11 per cent in the EU. 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 per cent.

Lockdown measures are also 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 per cent of global electricity generation – 6 percentage points ahead 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.

Link to report.

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