The impact of COVID-19 on renewable energy
The COVID-19 pandemic has had mixed fortunes for the energy sector and the transition to renewable energy, according to a recently published report from the International Energy Agency.
World Energy Outlook 2020 is the agency’s flagship publication and addresses some of the potential routes ahead from the Coronavirus crisis, including how the pandemic has affected investment into the energy sector, global power demand and carbon emissions.
It includes several headline statistics that demonstrate why, at least in respect of renewable energy, the effects of the virus have been both positive and negative:
- 18% fall in global energy investment
- 5% fall in global energy demand
- 7% fall in global energy-related CO2 emissions
However, it remains to be seen how long these effects will persist, and it is likely that demand will return to pre-pandemic levels at some point during the first half of the coming decade.
How fast will energy demand recover?
Under current policies and expectations, global energy demand would return to, and possibly exceed its pre-pandemic level by 2023. This is the IEA’s Stated Policies Scenario.
However, if the pandemic lasts for longer than currently expected, leading to further national lockdowns, it could be 2025 before energy demand recovers fully – the IEA calls this the Delayed Recovery Scenario.
The report also outlines two further routes beyond the pandemic:
- the Sustainable Development Scenario, in which uptake of solar and wind power increases more than currently predicted
- the Net Zero Emissions by 2050 Case, a dramatic global effort to eliminate excess carbon emissions by the midpoint of the century
Any of the four scenarios could emerge in the coming years, although the IEA notes that to achieve carbon neutrality by 2050, all parts of the energy economy would need to make significant progress, as targets would be too ambitious for failings in one area to be made up elsewhere.
The new king of energy
Dr Fatih Birol, executive director of the IEA, anticipates that solar energy will emerge as the primary source of renewable energy during the coming years.
“I see solar becoming the new king of the world’s electricity markets. Based on today’s policy settings, it is on track to set new records for deployment every year after 2022,” he said.
“If governments and investors step up their clean energy efforts in line with our Sustainable Development Scenario, the growth of both solar and wind would be even more spectacular – and hugely encouraging for overcoming the world’s climate challenge.”
The COVID-19 pandemic has raised significant challenges for humanity worldwide; however, it has also shown the way forwards in areas like remote working and video conferencing, which were perhaps under-utilised in the past, and have the potential to save on business-related energy and emissions.
As we move beyond the pandemic, this could help to control global power demand, while accelerating the transition towards carbon-neutral and renewable energy sources over the next decade.