Wind and solar will grow this year while coal, oil and gas suffer “staggering” reverses as demand plunges amid global coronavirus lockdowns, said the International Energy Agency (IEA).
In what it described as the biggest shock to the global energy system since the second world war, the IEA predicted overall energy demand will fall by 6% this year and electricity by 5%. The “unprecedented” falls in energy consumption will also spur a record annual fall in carbon emissions of almost 8%, returning them to their lowest level since 2010.
The Paris-based agency’s analysis of the first 100 days of 2020 tell very different stories for the world’s major power generation sources in a radically changed electricity market where “weekdays look like a pre-crisis Sunday”.
“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 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.”
Renewables, especially wind and solar, are benefitting from their low fuel costs and priority grid access to increase their share across all markets, becoming the only energy source to grow this year as power systems abandon fossils first when demand falls.
The IEA reckons wind and solar will increase their share of global generation to 9% in 2020 under a ‘u-shaped’ economic recovery, with the total low-carbon share, including nuclear, hydrogen and others, rising to 40%.
Coal and gas, by contrast, “are finding themselves increasingly squeezed between low overall power demand and increasing output from renewables”, said the IEA. Their combined share of total power generation is set to drop by three percentage points, back to 2001 levels. Coal is expected to suffer its biggest drop in demand since World War Two at 8%, while gas is on course for a 5% fall.
The IEA warned that he advances of renewables and the decline of emissions can’t be taken for granted, as governments start to take key decisions about how to get their economies moving again.
Birol said: “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.”