Global energy demand will drop five percent this year and carbon emissions by seven percent while the impact of COVID-19 on the sector will be felt for years to come, according to the International Energy Agency’s World Outlook.
The report highlights a huge shock to the energy industry from the coronavirus pandemic, with nearly all parts of the sector declining. Coal use will decline seven percent as renewable capacity deployment rises slightly, according to the IEA.
Overall, annual CO2 emissions will fall by 2.4 gigatons, taking emissions back to where they were a decade ago. Methane emissions, however, may not have fallen despite a three percent reduction in natural gas demand and seven percent for oil.
“Despite a record drop in global emissions this year, the world is far from doing enough to put them into decisive decline,” IEA Executive Director Fatih Birol said in the report.
Economic downturns and reduced demand due to COVID-19 precautions may impact the energy sector negatively until 2023. A prolonged pandemic and resulting economic slump may push that recovery back to 2025, according to the IEA.
Prior to the health crisis, energy demand was expected to grow 12 percent between 2019 and 2030, as developing nations broadened their power generation capacities. The economic wake of COVID-19 is hitting poorer people harder, and years of progress could be reversed with electricity becoming unaffordable to more than 100 million sub-Saharan Africans who currently have electricity connections, the report warns.
Hydropower is the still the top renewable resource for electricity generation globally, but solar is rising fast and forecast to set new records for deployment annually after 2022, according to the IEA. This mobilized deployment of new and often distributed or remotely located renewable resources will put extra pressure on the power grid.
Demand for natural gas, which already is the top resource for U.S. power generation, will rise globally about 30 percent by 2030 and may go into slight decline after 2040, the IEA projection shows.