Renewable energy will be the only energy source to see increased demand in 2020 as the COVID-19 pandemic represents the biggest shock to the global energy system since the Second World War, according to the International Energy Agency (IEA).
The renewable sector “has so far been the energy source most resilient to COVID-19 lockdown measures,” the agency said in its Global Energy Review, with global use of renewable energy increasing 1.5 percent in the first three months of this year, compared with the first quarter of 2019. Global use of renewable energy is seen rising 1 percent this year, with the expansion of solar, wind and hydro power helping to add almost 5 percent to renewable electricity generation.
Overall, global energy demand declined by 3.8 percent in the first quarter of 2020, with the biggest impact coming in March as restrictions were imposed in Europe, North America and elsewhere, the agency said. Depending on when lockdown measures are eased, the report projects a 6 percent drop in total energy demand in 2020 – equivalent to losing the entire energy demand of India and dwarfing the impact of the 2008 financial crisis.
“This is a historic shock to the entire energy world. Amid today’s unparalleled health and economic crises, the plunge in demand for nearly all major fuels is staggering, especially for coal, oil and gas. Only renewables are holding up during the previously unheard-of slump in electricity use,” said Dr Fatih Birol, the IEA Executive Director. “It is still too early to determine the longer-term impacts, but the energy industry that emerges from this crisis will be significantly different from the one that came before.”
Renewable usage is holding up despite lower overall electricity demand as they are generally dispatched before other electricity sources due to lower operating costs or because of regulatory priority, the report shows. Solar and wind projects completed last year have also added to capacity, helping to push the share of renewables in global electricity generation to almost 28 percent in Q1 this year, from 26 percent a year earlier.
Even so, the renewable sector’s growth is “is smaller than anticipated before the Covid-19 crisis,” the report notes, while further supply chain disruptions and labor restrictions due to the pandemic could slow the pace of capacity additions this year.