5 things to know about how coronavirus has hit global energy

debt 2020

(Credit: Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Douglas Broom, Senior Writer, Formative Content


  • Coronavirus lockdowns have led to the biggest fall in energy demand in 70 years.
  • Renewables have increased their contribution to the energy mix as fossil fuel demand has seen a widespread fall.
  • Drop in energy consumption will trigger the biggest ever fall in global CO2 emissions.

The global energy market is experiencing its biggest shock in 70 years. Coronavirus has caused energy demand to plummet, dwarfing the impact of the 2008 financial crisis and leading to a record decline in carbon emissions, a new report from the International Energy Agency states.

Based on analysis of 100 days of data, the IEA projects that global energy use in 2020 will fall by 6% in what it calls a “historic shock to the entire energy world”. That’s the equivalent of losing the entire energy demand of India, the world’s third largest energy consumer.

Here are five things to know about the dramatic fall in energy demand brought on by the pandemic.

 

1. Energy demand has collapsed everywhere

Global energy demand for the first quarter of this year fell by 3.8% compared to last year, the IEA says. With more than half of the world’s population (representing 60% of global GDP) under lockdown, the IEA says the impact on energy use will depend on how long restrictions continue.

Assuming only a gradual easing of lockdown measures, the IEA says global energy demand could fall by 6% this year. The decline would be more than seven times the impact of the 2008 financial crisis, bucking the trend for growing energy demand over the last five years.

coronavirus energy market renewable fossil fuels pollution television gaming entertainment electricity power generation IEA environment demand
A shock to the system.
Image: IEA

China, with eight weeks of lockdown early in the year, saw the biggest fall in energy demand, down 7% up to the end of March. In the United States, demand was down 6% in the first quarter of the year but the IEA says this was partly due to a milder winter before restrictions took effect.

Energy use in Europe fell by similar levels, but in Italy, which for some weeks was the epicenter of the European outbreak, electricity demand dropped by over a quarter.

Since full national lockdown has been imposed in India demand has dropped by almost 30%.

2. Coal and oil were the hardest hit

Fossil fuels bore the brunt of the fall in demand and the hardest hit energy source was coal. Restrictions on economic activity pushed global coal demand down by 8% in the first quarter of 2020, mostly down to a drop in electricity needs. Industrial coal demand also fell, especially in China as its coronavirus restrictions halted factory production.

coronavirus energy market renewable fossil fuels pollution television gaming entertainment electricity power generation IEA environment demand
As fossil fuel use will decline, could renewable energy take its place?
Image: IEA

Restrictions on travel contributed to a 5% fall in demand for oil, with fewer cars on the road and a sharply reduced demand from the shipping industry. As airlines grounded their fleets worldwide and countries closed their airports to all but repatriation and cargo flights, jet fuel requirements fell by over a quarter in March.

3. Renewables bucked the trend

Renewables were the only energy source to see demand grow in the first quarter, partly driven by new wind and solar installations coming on stream this year. They increased their share of the energy mix largely because they cannot adjust their output to match demand, according to the IEA.

coronavirus energy market renewable fossil fuels pollution television gaming entertainment electricity power generation IEA environment demand
Renewable energy has grasped this opportunity to take hold of the energy sector.
Image: IEA

Renewables made record high contributions to electricity generation in Belgium, Germany, Hungary, Italy and the United States.

Falling costs of production and a pipeline of new renewable energy projects will see the sector increase its share of electricity generation throughout the year, says the IEA.

With falling fossil fuel demand and rising renewable use, the agency forecasts the biggest ever fall in CO2 emissions. Annual emissions are likely to match levels from ten years ago, with the fall in output six times steeper than the previous record reduction following the financial crisis in 2009.

4. Every day is Sunday

Analysts say that demand in the global electricity market has “resembled that of a prolonged Sunday”, with the pattern of energy use on weekdays more like that normally seen at the end of the week. They add that a gradual easing of lockdowns will not produce an immediate rebound in demand as economic activity will remain depressed.

IEA analysis of data for 30 countries through to mid-April shows that the level of energy demand is driven by the length and severity of lockdowns imposed. Where a full lockdown is in force, energy demand has dropped by a quarter but partial lockdowns produce an average 18% drop.

coronavirus energy market renewable fossil fuels pollution television gaming entertainment electricity power generation IEA environment demand
A higher residential use of energy versus a lower industrial use has overall reduced global demand.
Image: IEA

In addition to the stringency of the lockdown, the IEA says the makeup of a country’s economy also determines how badly energy demand is impacted with the worst effects being felt by nations with a large services sector.

What is the World Economic Forum doing about the coronavirus outbreak?

A new strain of Coronavirus, COVID 19, is spreading around the world, causing deaths and major disruption to the global economy.

Responding to this crisis requires global cooperation among governments, international organizations and the business community, which is at the centre of the World Economic Forum’s mission as the International Organization for Public-Private Cooperation.

The Forum has created the COVID Action Platform, a global platform to convene the business community for collective action, protect people’s livelihoods and facilitate business continuity, and mobilize support for the COVID-19 response. The platform is created with the support of the World Health Organization and is open to all businesses and industry groups, as well as other stakeholders, aiming to integrate and inform joint action.

As an organization, the Forum has a track record of supporting efforts to contain epidemics. In 2017, at our Annual Meeting, the Coalition for Epidemic Preparedness Innovations (CEPI) was launched – bringing together experts from government, business, health, academia and civil society to accelerate the development of vaccines. CEPI is currently supporting the race to develop a vaccine against this strand of the coronavirus.

5. It won’t be over anytime soon

The IEA forecasts that energy demand will contract by 6% this year, the biggest percentage drop for 70 years. Oil consumption alone will fall 9% – back to 2012 levels.

coronavirus energy market renewable fossil fuels pollution television gaming entertainment electricity power generation IEA environment demand
The drop in energy production and consumption could give the environment a well earned break.
Image: IEA

Coal will be hit almost as hard, although a post-lockdown recovery in China is expected to partially offset cuts elsewhere in the world. Gas will be hit by reduced industrial activity and nuclear will track reduced energy demand. Only renewables will grow, extending the lead on coal-fired generation that was established in 2019.

coronavirus energy market renewable fossil fuels pollution television gaming entertainment electricity power generation IEA environment demand
With fossil fuel use down, CO² emissions have plummeted.
Image: IEA

the sting Milestones

Featured Stings

Stopping antimicrobial resistance would cost just USD 2 per person a year

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Lebanon: UN rights office calls for de-escalation of protest violence

Here’s how companies can make sure they are blockchain-ready

Why the financial scandals multiply?

JADE Generations Club: Connecting perspectives, changing Europe.

At global health forum, UN officials call for strong, people-focused health systems

To entrepreneurship and beyond!

My ‘’cultural’’ contacts with China

‘We are nowhere closer’ to Israeli-Palestinian peace deal, than a year ago, Security Council hears

‘Rare but devastating’ tsunamis underscore need for better preparation, UN chief urges on World Day

‘Regional security and integration’ in Central Africa under threat, Security Council warned

‘Spectre of poverty’ hangs over tribes and indigenous groups: UN labour agency

Recovery and Resilience Facility: Romania submits official recovery and resilience plan

Artificial intelligence: Commission takes forward its work on ethics guidelines

Industrial policy: recommendations to support Europe’s leadership in six strategic business areas

The ocean is teeming with microplastic – a million times more than we thought, suggests new research

Can Obama attract Iran close to the US sphere of influence?

Bring killers of journalists to justice: UN agency seeks media partners for new campaign

Regulate social media platforms to defend democracy, MEPs say

Canada has the most comprehensive and elaborate migration system, but some challenges remain

G20 LIVE: World Leaders in Turkey for G20 Summit. Global Economy will be discussed in Antalya

These countries are the most optimistic about economic recovery from the pandemic

Last-chance Commission: Why Juncker promised investments of €300 billion?

COP25: Developing nation’s strike hard

Ireland’s planning to make its Emerald Isle even greener

Peer-to-peer learning: a way to develop medical students’ trainings

ISIL continues to pose a ‘serious challenge’ worldwide – UN counter-terror chief

Biodiversity: MEPs demand binding targets to protect wildlife and people

Leaders need hard data to make the hard decisions about sustainability

Nicaragua ‘crisis’ still cause for concern amid murder, torture allegations: Bachelet

Trump: Hostile to Europe, voids Tillerson’s “ironclad” ally pledge

Businesses, governments and consumers to implement a more climate-friendly approach to #BeatPlasticPollution on World Environment Day 2018

Right2Water initiative: Is the Commission ready to listen to citizens?

Trump’s withdrawal from the Paris climate deal is bad for US business. Here’s why.

3 natural mysteries that could be explained by quantum physics

The winds of change: 5 charts on the future of offshore power

Millions of Bangladeshi children at risk from climate crisis, warns UNICEF

COVID-19 and the importance of scientific credibility in decreasing the number of cases

Antitrust: Commission opens investigation into possible anti-competitive conduct of Amazon

Plastic is a global problem. It’s also a global opportunity

NASA is recruiting new astronauts – this is what it takes to apply

Why it’s time to celebrate migrants

Fighting forest fires in Europe – how it works

The Pegasus Project awarded the 2021 Daphne Caruana Galizia Prize for Journalism

Detecting online child sexual abuse requires strong safeguards

Sexual reproductive health rights SRHR and ending HIV: can one be achieved without the other?

Greenhouse gas emissions have already peaked in 30 major cities

Transparency, EU values, and pluralism: new rules for European political parties

Central Asia bloc has important role in ‘peace, stability and prosperity’ beyond region, says Deputy UN chief

Greater transparency, fairer prices for medicines ‘a global human rights issue’, says UN health agency

It’s time to end our ‘separate but unequal’ approach to mental health

How smart tech helps cities fight terrorism and crime

EU and Mercosur reach agreement on trade

UN committed to helping Haiti build better future, says Guterres, marking 10-year anniversary of devastating earthquake

Antitrust: Commission sends Statement of Objections to O2 CZ, CETIN and T-Mobile CZ for their network sharing agreement

5 things to know about the exploding world of pro gaming

World Food Programme accesses Yemeni frontline district for first time since conflict began

UN chief calls for ‘immediate end’ to escalation of fighting in southwestern Syria, as thousands are displaced

The world’s food waste problem is bigger than we thought – here’s what we can do about it

A Sting Exclusive: “Seize the opportunity offered by Africa’s continental free trade area”, written by the Director General of UNIDO

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: