According to a report by Climate House, the International Energy Agency (IEA) has stated that renewable energy will be the only energy source to meet demand growth in 2020, due to the shrinking coal, oil, and gas markets.
In its first report since the outbreak of COVID-19, the IEA examined global energy consumption and carbon dioxide emissions trends for the remainder of the year.
The report points out that although the growth rate of renewable energy may decline this year due to supply chain disruptions and measures such as maintaining social distancing, which have severely delayed the construction and installation of renewable energy projects, renewable energy has so far been the most resilient energy source to the lockdown measures implemented in Wuhan due to the COVID-19 pandemic. The demand for renewable electricity has not been significantly affected by the overall decline in energy consumption.
Renewable energy demand increased by 1.5% in the first quarter of this year compared to the first quarter of 2019
The IEA had previously predicted that solar, wind, and other clean energy capacity would likely see record-breaking growth in 2020. However, as Climate Home reported earlier, the economic slowdown has severely impacted both businesses and residential rooftop solar panels, which are the main drivers of solar growth. This could affect the IEA's forecast.
The lifting of social distancing measures around the world and the scope and timing of economic stimulus packages will affect how much renewable energy capacity can be added this year.
But the IEA said the pandemic's impact on total renewable energy generation this year should be limited. Global energy demand fell 3.8% in the first quarter of this year compared with the first quarter of 2019 as lockdowns in North America and Europe to curb the spread of the coronavirus pandemic.
Bucking this trend, renewable energy demand grew by 1.5% during the same period, which the IEA said was mainly due to new wind and solar power capacity coming online over the past year and a preference for renewable energy in most power sectors.
A report by S&P Global Ratings indicates that India is likely to experience its first power surplus in 2020, following a decline in energy consumption. S&P Global Ratings estimates that the economic slowdown will only have a limited impact on India's renewable energy sector, as it has a "must-operate" status, meaning that power distribution companies must use wind and solar power whenever they generate electricity.
The continued growth of renewable energy is putting increasing pressure on global coal demand, which has fallen by nearly 8%. The IEA believes that cheap gasoline, mild weather, and temporary shutdowns in Chinese industry also contributed to the plunge. Travel restrictions and a dismal aviation industry led to a nearly 5% drop in oil demand, while natural gas demand fell by 2% compared to the first quarter of 2019.
IEA Executive Director Fatih Birol stated, "During this unprecedented period of low electricity consumption, only renewable energy has remained unmoved. It is too early to predict the long-term impact, but the energy industry will be completely reshaped after this crisis."
The IEA predicts that global oil demand will decline by 9% in 2020, returning to 2012 levels.
The IEA's forecast for global energy demand for the remainder of this year assumes a slow economic recovery following months of restrictions that caused a global recession, but with permanent damage to economic activity. Under this scenario, the IEA estimates that global energy demand could shrink by 6% this year, the largest drop on record and more than seven times the impact of the 2008 financial crisis.
Energy-related carbon dioxide emissions in 2020 will decrease by nearly 8% compared to 2019, reaching the lowest level since 2010 and the largest reduction on record.
In early April, analysts at Carbon Brief estimated that carbon dioxide emissions would fall by 5.5% compared to 2019, but the rebound in emissions after the pandemic crisis could be greater than the decline, unless the investment wave to restart the economy flows into cleaner, more resilient energy infrastructure.
The IEA predicts that global low-carbon energy will far outpace coal-fired power generation, with global oil demand falling by 9% in 2020, returning to 2012 consumption levels. Coal demand will decrease by 8% due to lower electricity consumption. However, a rebound in coal demand in China will offset the decline in India and other regions. Natural gas demand is expected to fall more throughout the year than in the first quarter.
According to IEA data, global renewable energy consumption is projected to grow by 1% in 2020, while electricity generation is expected to increase by nearly 5%, a growth rate still lower than pre-pandemic forecasts. Historically, IEA forecasts have typically underestimated the pace of renewable energy deployment.
Source: Environmental Information Centre
