IEA Projects Demand for Renewable Energy to Surge Post-Pandemic While Fossil Fuels Collapse

A new report Thursday from the International Energy Agency projects a bleak year for fossil fuels but a banner 2020 for renewables as the coronavirus pandemic triggers "the biggest shock to the global energy system in more than seven decades."

"This is a historic shock to the entire energy world," Fatih Birol, the IEA's executive director, said in a statement. "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."

"It is still too early to determine the longer-term impacts," he said, "but the energy industry that emerges from this crisis will be significantly different from the one that came before."

The Paris-based organization estimates in its "Global Energy Review" that--if global economies recover slowly from the impacts of the health crisis--global energy demand will drop by 6% in 2020. Such a decline would bring with it a nearly 8% drop in energy-related carbon emissions, the biggest ever drop in absolute terms in modern history.

"Resulting from premature deaths and economic trauma around the world, the historic decline in global emissions is absolutely nothing to cheer," Birol said, adding, "And if the aftermath of the 2008 financial crisis is anything to go by, we are likely to soon see a sharp rebound in emissions as economic conditions improve."

According to the report, Covid-19 contributed to global coal demand dropping in the first three months of year by roughly 8% compared to the same period in 2019. The report also projects global coal demand will drop by about 8% total in 2020. In the U.S. it could drop by 25%.

Oil demand dropped nearly 5% in the first quarter compared to 2019's first quarter. And in 2020, demand could drop by 9%, bringing the yea, in line with 2012 levels, the report adds.

Natural gas demand also witnessed a drop--it was down 2% in first quarter. It could drop 5% in 2020.

Renewables are a vastly different story.

In the first quarter, demand went up by about 1.5%, and the report estimates that global demand for renewable energy could go up 1% in 2020.

"Renewable energy has so far been the energy source most resilient to Covid-19 lockdown measures," says the report.

"A faster recovery would have a minimal impact on renewable energy production, though it would enable more new renewables-based projects to be completed," the publication continues. "If recovery is slower, renewable energy would still increase, making renewables the energy source the most resilient to the Covid-19 current crisis."

Birol, in his statement, urged global governments to put "clean energy technologies--renewables, efficiency, batteries, hydrogen, and carbon capture--at the heart of their plans for economic recovery."

"Investing in those areas can create jobs, make economies more competitive, and steer the world towards a more resilient and cleaner energy future," he said.