IEA Warns Energy Demand Set to Fall Due to COVID-19
- May 7, 2020 9:46 am GMT
The International Energy Agency (IEA) has made a dramatic forecast of a 6 per cent drop in worldwide energy consumption, according to its newly-released Global Energy Review for 2020.
Grid professionals will see electricity demand plummet by 5 per cent, which is seven times the reduction after the 2008 financial crisis. The report also expects natural gas consumption to fall by 5 percent, which is the largest reduction on record since it became a major fuel at the mid point of last century.
This decline is unprecedented. It is the equivalent of losing the entire energy demand of India, which is the world's third-biggest consumer of power.
“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,” said Dr Fatih Birol (pictured above), the IEA Executive Director. “Only renewables are holding up during the previously unheard-of slump in electricity use. 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 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. 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.
This is going to cause all sorts of problems for grid operators. The only positive note is that CO2 emissions have had the biggest drop ever, and low carbon technologies continue to increase market share, after overtaking coal world-wide in 2019.
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