Climate crisis: Coronavirus causing collapse in demand for fossil fuels while renewables make major gains, according to major global report
Pandemic on course to cause largest decrease in emissions ever recorded, six times larger than the previous record drop in 2009 following global financial downturn, says International Energy Agency
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Your support makes all the difference.Global energy demands are set to plunge amid the worst shock to the sector in 70 years due to the coronavirus crisis, with fossil fuels on course for a historic decline and renewables set to gather greater momentum, according to the world’s energy watchdog.
The International Energy Agency said the world’s CO2 emissions are expected to fall by 8 per cent this year as a result of the pandemic, which has shut down much of the global economy and caused a collapse in energy demand seven times greater than the decline after the 2008 global financial crisis.
The IEA’s Global Energy Review projects that energy demand will fall 6 per cent in 2020, which the agency described as “unprecedented”, and “the equivalent of losing the entire energy demand of India”.
Renewable electricity is forecast to be the only energy source resilient to the enormous slump caused by the pandemic and the only area expected to see growth in 2020.
“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 IEA executive director Dr Fatih Birol.
“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.”
The agency’s report is based on analysis of more than 100 days of real data so far this year and is said to provide an almost real-time estimate of energy usage and emissions.
Its projections for 2020 are based on energy consumption and CO2 emissions trends it believes are likely to evolve over the rest of 2020. The predictions have been made with the expectation the lockdowns and shuttering of schools, businesses and services are gradually eased over the coming months.
The report said advanced economies are expected to see the biggest declines, with demand set to fall by 9 per cent in the United States and by 11 per cent 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,” the IEA said.
The agency found each month of worldwide lockdown at the levels seen in early April reduced annual global energy demand by about 1.5 per cent.
The report details how the lockdowns alter and reduce energy consumption, “with consumption levels and patterns on weekdays looking like those of a pre-crisis Sunday”, the agency said.
Full lockdowns have pushed down electricity demand by 20 per cent or more, with lesser effects from partial lockdowns.
Overall, demand is set to decline by 5 per cent in 2020, the largest drop since the Great Depression in the 1930s.
Renewables’ success amid the fall in energy demand is due to various factors identified in the report, including their low operating costs, their priority access to grids, and new wind and solar power projects completed in 2019 and early 2020.
Together, these factors are squeezing coal, oil and natural gas, all of which are on course to see historic declines in demand.
“The oil industry has never seen anything like 2020,” the agency said in a report published earlier this month, with prices having fallen by almost 75 per cent since the start of the year and with some producers losing money on every barrel they produce.
Natural gas demand is expected to decline 5 per cent in 2020. This represents the largest recorded year-on-year drop in consumption since natural gas demand developed at scale during the second half of the 20th century.
And coal is also “particularly hard hit”, the agency said. Global demand is projected to fall by 8 per cent in 2020, the largest decline since the Second World War. After peaking in 2018, coal-fired power generation is now set to fall by more than 10 per cent this year.
Solar and wind are on track to help lift renewable electricity generation by 5 per cent in 2020, aided by higher output from hydropower.
But Dr Birol warned that “nobody should take any of this for granted – greater investments and smarter policies are needed to keep electricity supplies secure”.
The result of the energy demand slump, particularly the declines in coal and oil use, mean global energy-related CO2 emissions are set to fall almost 8 per cent in 2020, to their lowest level since 2010.
“This would be the largest decrease in emissions ever recorded – nearly six times larger than the previous record drop of 400 million tons in 2009 that resulted from the global financial crisis,” the IEA said.
This 8 per cent cut is “roughly equivalent to the annual emissions reductions needed to limit warming to less than 1.5C above pre-industrial temperatures”, according to climate news website Carbon Brief.
This is the target set out in the Paris Agreement, and would require similar reductions every year this decade.
But the IEA said the huge fall in demand was unlikely to last.
Dr Birol said: “Resulting from premature deaths and economic trauma around the world, the historic decline in global emissions is absolutely nothing to cheer.”
“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,” he added.
Charlie Kronick, oil finance advisor to Greenpeace UK, told The Independent the impacts of coronavirus on the energy sector can help the world prepare for the numerous systemic shocks the climate crisis is causing.
He said: “The resilience of renewable energy in the face of a public health tragedy and resulting economic collapse should be a huge wake up call to politicians and investors. The markets are shifting and the clean energy future we need to avoid climate breakdown is ready to be made a global reality.
“Let’s not waste time or money looking back – we are in a dress rehearsal for the systemic shocks that climate change will bring. The UK Government must harness this resilience and build on it to create a zero carbon economy that protects the workers and communities that support and depend on it.”
Jonathan Bartley, co-leader of the Green Party, called on the UK government to stop supporting polluting companies and provide greater support for renewable technology.
He told The Independent: “Emissions dropping because of a global pandemic isn’t good news, particularly when the fate of our economy and livelihoods is still held hostage by dependence on fossil fuels.
“We want to see emissions drop because of a stronger and bigger renewable industry, lower fuel bills and the creation of hundreds of thousands of new green jobs. And that’s what must be at the heart of our recovery from this crisis.
“Fossil fuels were already on the way out, and subsidised massively. There can be no bailouts for big polluters.
“We need a new normal, with radical investment in our renewable future, and a more resilient world.”
Richard Black, director of the Energy and Climate Intelligence Unit said the crisis could be a turning point for adoption of renewable energy.
He said: “In recent weeks there have been robust promises from national leaders and calls from businesses for post-coronavirus stimulus packages to accelerate the clean energy transition. If these pledges come good, and states do develop concrete recovery policies to drive the low-carbon transition, then the crisis could come to be seen as a genuine turning point for world energy markets.”
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