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After the worst hit in many decades, global energy demand will recover as soon as possible to pre-corona crisis levels in 2023, the IEA estimates in a recent report. If the crown crisis takes hold, it won’t happen until 2025.
Illustration image.
Matthias Ibeler / Ørsted
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The recent estimates appear in this year’s World Energy Outlook, the annual “energy bible” of the International Energy Agency (IEA).
The agency has been created by OECD countries to advise member countries on, among other things, energy security. In this year’s report, the energy agency looks in particular at the restructuring needed during this decade to achieve climate goals and the consequences of the corona crisis.
“The Covid-19 crisis has created greater disruption in the energy sector than any other event in recent history, leaving scars that last for years,” the IEA said in a statement.
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Power consumption drops five percent
The IEA expects the corona crisis to cause global energy consumption to drop by 5 percent this year. Until now, such drops had only occurred in connection with the world wars and Great Depression of the 1930s. According to the IEA, decreasing energy consumption will reduce CO emissions from the energy sector by seven percent this year.
Only in 2023 will global energy consumption recover to the pre-crisis level, the agency estimates. In a scenario in which the crisis drags on even further, energy consumption returns to pre-crisis levels only in 2025, the agency says.
Investments in the energy sector are expected to fall 18 percent this year, according to the IEA. It is in the oil and gas industry where investments fall the most. There is also great uncertainty ahead, according to the IEA report (read more in a separate case on the IEA’s oil outlook).
This is how the IEA estimates the evolution of energy demand up to 2030, broken down by energy source in the different scenarios of this year’s edition of the “World Energy Outlook” report. STEPS is a scenario where current policies continue, DRS is based on a long-lasting corona crisis, SDS is the sustainability scenario where climate goals are achieved, and NZE2050 is a scenario where the world actually accelerates green change.
International Energy Agency (IEA)
Predicts strong growth in renewable energy
In all IEA scenarios, renewable energy will play an important role, according to this year’s World Energy Outlook. As the policy is in place, renewable energy will generate 80 percent of the expected growth in energy consumption in the next decade, the energy agency believes.
“Supportive measures and more mature technology ensure very cheap capital in the main markets. Solar panels are now generally cheaper than new coal and gas power plants in most countries, and solar projects now offer the cheapest electricity ever, “writes the IEA.
– Solar energy will be the new king in the world’s energy markets, says IEA leader Dr. Fatih Birol.
– Based on the current political framework, it is set to set new developing records every year after 2022.
This also requires significant investments in power grids, which the IEA says can be a big challenge. The agency previously warned that further development of solar energy can result in higher grid rents for customers who do not have the opportunity to use this technology.
Hydropower remains the largest source of renewable energy, but the fastest growth is in solar, land and sea winds, according to the agency.
The IEA also expects energy efficiency to accelerate in the next decade. The agency also expects a new supply of technologies such as hydrogen, CCC capture, storage and use (CCUS) and nuclear power.
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The leader of the IEA, Dr. Fatih Birol.
OZAN KOSE / AFP
Requires dramatic changes
Without new measures to halt gigantic emissions from, among other things, coal-fired power plants, steel plants, and cement factories, the world will block a 1.65-degree rise in temperature above pre-industrial levels, new shows show. analysis in this year’s report. The goal of the Paris Agreement is to limit global warming to well below two degrees, and preferably to a minimum of 1.5 degrees.
– Despite a record drop in global emissions this year, the world is far from doing enough to send emissions into a real recession, says Birol.
– Only faster structural changes in the way we produce and consume energy can break this emissions trend forever, he adds.
The rapid climate cuts required over the next decade could be demanding, emphasizes the IEA. The agency illustrates this with what is required to reduce global emissions by 40 percent by 2030:
- Low-emission energy sources should account for 75% of global electricity production in 2030, up from 40% in 2019.
- Electric cars should account for more than 50 percent of global passenger car sales in 2030, up from 2.5 percent in 2019.
- Innovation and expansion of technology such as electrolyzers and small nuclear reactors is needed
In the STEPS scenario, the IEA bases its current policy plans. With the current outlook, gas and oil consumption will increase by 2030, while coal consumption will decrease. But great growth is expected in renewable energy. This means that CO2 emissions are stabilizing, according to the energy agency.
International Energy Agency (IEA)
