The International Energy Agency (IEA) has released a report into the impacts of Covid-19 on global energy demand and carbon dioxide emissions, revealing that both metrics are falling at an unprecedented rate.
The report, ‘Global Energy Review 2020’, was published today, and draws from 100 days of research into the spread of Covid-19 and the responses of countries around the world, to draw ominous conclusions for the energy industry. Of greatest concern will be the precipitous decline in global energy demand, with countries in full lockdown seeing a 25% decline in energy demand per week. This is in stark contrast to a decline of just 3.8% in the first quarter of the year, as the lockdown enforced in a number of countries, leading to vacant workspaces and empty industrial buildings, has slashed the world’s need for electricity.
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IEA executive director Fatih Birol noted that “this is a big shock, when we look at the numbers in our global energy system.”
“We have never seen such a big decline,” he continued, “and this is happening in almost all the countries around the world, especially in electricity generation, but also for the industrial sector. [Demand for] all the fuels are going down.”
He noted that the latest drop in global energy demand is more than seven times larger than the previous significant decline, in the wake of the 2008 financial crisis, and went on to compare the world’s current energy demand to that of a weekend, suggesting that weekly electricity demand is now akin to a week of Sundays.
The prevalence of lockdowns and quarantine measures across the world are key drivers of this trend; while a decline in industrial and commercial energy demand is somewhat offset by an increase in residential energy demand, the shift towards working and studying from home has led to a net fall in energy demand.
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By GlobalData“The share of global energy use that was affected by mandatory lockdowns jumped from 5% to more than half of global energy markets,” said Laura Cozzi, chief energy modeler at the IEA and one of the report’s authors. “Today, as we speak, we are right in the middle of the storm, with 50% of global energy use being affected by mandatory lockdowns.
“If we look at the speed at which these shockwaves have come, since the start of the month, this is an unprecedented crisis,” she continued.
However, there were some silver linings to come from the report, with renewable power remaining relatively stable as traditional sources of electricity generation are hit the hardest by the pandemic. While demand for coal, oil and natural gas were down 8%, 5% and 2% respectively, renewables remained resistant to the crisis, with global use of renewables actually increasing in the first quarter of the year, by 1.5% compared to the first quarter of 2019, and renewable electricity generation increasing by 3% over the period.
This has led the IEA to predict that global use of renewables will increase by 1% over the course of 2020, with projects that operate independently from large, central energy grids, such as small-scale solar panels mounted atop homes and businesses, providing a source of energy independent from traditional grid infrastructure.
Similarly, this fall in demand has led to significant reductions in global carbon dioxide emissions, falling by 5% in the first quarter of 2020 compared to the same period in 2019. The IEA predicts that this trend will continue over the remainder of the year, with 2020 on course for 8% lower emissions than in 2019, the lowest level since 2010, and the largest-ever year-on-year reduction in emissions, six times greater than the decline in emissions following the financial crisis.
Yet these changes may not be sustainable, as Cozzi is wary that a recovery in electricity demand and production could lead to a parallel increase in harmful emissions, back to normal levels.
“We are going to see a very significant amount of reduction [in emissions] of 2.6 gigatons,” she said. “To give you an idea of how much we are talking about, if you look at the historic fall in carbon dioxide emissions post-World War Two [and] multiply that by two, and that is the type of decline we have seen. It is huge.
“However, very little of it is structural, as economic activity may resume and we are expecting carbon dioxide emissions to up again.”
The IEA also announced that it would update its figures and predictions on a weekly basis as the Covid-19 pandemic unfolds, placing the agency at the forefront of climate and energy reporting during the crisis.
