IEA: Energy demand will fall by 5% in 2020 and emissions by 7%

Energy demand will be reduced this year by 5% and emissions by 7% as a result of the crisis of the new coronavirus, which will have lasting effects and change trends for the next decade, in which there will be a decline in coal and oil growth will come to an end.

These are some of the main projections of the International Energy Agency (IEA), which in its annual outlook report published on Tuesday presents four different scenarios in the face of great uncertainty about the recovery and the possibility of generating policies to accelerate the energy transition.

From the outset, in its most immediate diagnosis for 2020, a year in which investment in the energy sector will plummet by 18%, the IEA estimates that global oil consumption will fall by 8%, coal by 7% and natural gas by 3%, while renewables will have a small progression.

The lower contribution of fossil fuels will reduce carbon dioxide (_CO2) emissions by 2.4 gigatons, which will return to the level of a decade ago, although pollution will not fall to the same extent in the case of methane, another important greenhouse gas.

If before the COVID-19 hit the agency projected an increase in energy demand of 12% between 2019 and 2030, it has now revised down that percentage to leave it at 9% in case the global economy can recover in 2021 the pre-crisis level and by 4% if that recovery does not arrive until 2023.

In both scenarios, growth would be concentrated in electricity production with renewables, with 80% of the total by 2030, and in particular in photovoltaic solar energy, whose generation costs are now cheaper in many countries than in coal or gas plants.

COAL DECLINE

On the other hand, coal will go down and its weight in energy production in the horizon of 2040 will fall below 20% for the first time since the Industrial Revolution began.

The IEA estimates that by 2025 275 gigawatts of coal production will be closed in the world, which means 13% of the existing capacities in 2019, and that will happen mainly in the United States (100 gigawatts) and in the European Union (75 gigawatts).

Even so, new coal plants will continue to be opened in developing Asian countries, but at a much slower pace than the organization itself predicted in its previous studies, and in any case that will not compensate for the closures.

In the end, the weight of coal in electricity generation will fall from 37% in 2019 to 28% in 2030 if current policies are maintained and up to 15% if there is a shift towards sustainable development and compliance with the Paris Agreements to limit climate warming to less than two degrees Celsius.

THE UNKNOWN OF OIL

With oil, the study’s authors acknowledge that many elements of uncertainty persist. They assume that between now and 2030 consumption will stop progressing, but they also note that if the economic recovery takes time to arrive, the difference may be more than 4 million barrels per day, with a demand lower than the 100 million barrels per day that was reached in 2019.

It is clear that the volume of oil used as automotive fuel is going to decrease because its engines are becoming more efficient and because sales of electric vehicles take off. The demand for crude oil is increasingly going to come from the petrochemical sector.

As for natural gas, if energy policies are maintained, its global consumption will increase by 30% in the horizon of 2040 due to the pull in South and East Asia, where it is sometimes a substitute for coal plants to mitigate pollution.

The novelty of this year’s report is that for the first time a slight decline in gas use is anticipated in developed countries.

The IEA stresses that while the crisis has reduced greenhouse gas emissions, it also risks (from lower investment) delaying many decisions and policies for an energy transition towards a more sustainable future.

For example, it has calculated that if existing energy infrastructures (power plants or cars in circulation) continue to operate as in the past, that will contribute to a further rise in global temperature of 1.65 degrees.

Hence, it insists on its Sustainable Recovery Plan, with which thanks to an additional investment of one trillion dollars per year between 2021 and 2023 in electricity networks, electricity with low emissions or energy efficiency, 2019 would be the maximum peak of _CO2 emissions in history.

Source: The Vanguard