2020-05-22
Global energy demand sees record decline amid COVID-19, renewables stay resilient

Global energy demand sees record decline amid COVID-19, renewables stay resilient

Global energy demand declined by 3.8 percent in the first quarter of 2020 and resulted in a record annual decline in CO2 emission of almost 8 percent according to the International Energy Agency (IEA) latest report.

In April, IEA released, “Global Energy Review 2020” a comprehensive report that details the impacts of the COVID-19 crisis on global energy demand and CO2 emissions. The report is based on data collected from 30 countries, representing more than two-thirds of global energy demand.

“The report projects that energy demand will fall 6 percent 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,” IEA stated in the press release.

As per the findings, there is a plunge in demand for all major fuels. With global demand for coal being the hardest hit-- falling by almost 8 percent compared to the first quarter of 2019. Oil demand has been negatively impacted, too, and dropped by nearly 5 percent in the first quarter. Renewables, however, remains the bright spot and the only source that recorded a growth in demand amid the COVID-19 pandemic “driven by larger installed capacity and priority dispatch.”

“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,” Dr Fatih Birol, the IEA Executive Director said in the press release.

Analysis of the data through mid-April shows that countries in full lockdown are experiencing an average 25 percent decline in energy demand per week and countries in partial lockdown an average 18 percent decline.

IEA further projects that advanced economies are expected to see the biggest declines, with demand set to fall by 9 percent in the United States and by 11 percent in the European Union.

It adds, “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.”

The findings suggest with commercial and industrial operations being shut and an uptick in residential demand the electricity demand has declined sharply. The consumption levels and patterns on weekdays resemble that of a prolonged Sunday.

It further stated that depression in demand has lifted the share of renewables in the electricity supply, as their output largely remains affected by demand.

IEA, however, cautioned that “despite the resilience of renewables in electricity generation in 2020, their growth is set to be lower than in previous years.”

It added that nuclear power and global demand for biofuels is expected to fall. In fact, nuclear power, another major source of low-carbon electricity, is set to drop by 3 percent in 2020 from the all-time high it reached last year. The global demand for biofuels is also expected to fall significantly as restrictions on transport and travel reduce road transport fuel demand, including for blended fuels.

“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,” Dr Birol said.

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