IEA charts COVID-19 decline in global energy demand and emissions
In its new Global Energy Review 2020 report, released today, the IEA describes how economic turmoil, travel restrictions and lockdowns have affected the energy sector during the first quarter of this year. Assuming the lockdowns implemented around the world in response to the pandemic are progressively eased in most countries in the coming months, accompanied by a gradual economic recovery over the rest of 2020, the report offers estimates of what energy use by each fuel type and emissions may look like for the full year.
"The COVID-19 pandemic represents the biggest shock to the global energy system in more than seven decades, with the drop in demand this year set to dwarf the impact of the 2008 financial crisis," the IEA says.
Global energy demand was 3.8% lower in the first quarter of 2020, compared with the same period in 2019, according to the report. In Q1 2020, global coal demand was hit hardest, pushed down by almost 8% from Q1 2019. Global oil demand fell nearly 5%, while demand for natural gas decreased by around 2% in Q1 2020. Output from the world's nuclear power plants also declined in Q1 2020 as they adjusted to lower electricity demand levels, particularly in Europe and the USA.
The IEA found that each month of a global lockdown at the levels seen in early April reduces annual global energy demand by about 1.5%. Assuming lockdowns last for many months and recoveries are slow across much of the world, annual energy demand is projected to drop by 6% in 2020, compared with 2019. "If efforts to curb the spread of the virus and restart economies are more successful, the decline in energy demand could be limited to under 4%," the IEA says.
Global electricity demand in Q1 2020 declined 2.5%, while demand over the whole year is projected to drop by 5%. "A faster recovery would reduce electricity demand by 2% in 2020, as all areas of economic activity resume," the IEA suggests.
"Nuclear power has not been immune to the impacts of the COVID-19 crisis, though in most cases reactors have continued to produce electricity," the report notes. Global nuclear power generation fell by about 3% in Q1 2020, compared with Q1 2019, due to lower electricity demand and the retirement of some reactors. "In our estimate for 2020, nuclear power declines by 2.5% from 2019 due to lower demand and delays for planned maintenance and construction of several projects. If the recovery from the crisis is faster, electricity demand would be higher and some new reactors would be completed in 2020, leading to a reduction in nuclear power in 2020 of just over 1%."
During the first quarter of 2020, "Nuclear power has been an important source of power system flexibility in Europe, helping to maintain electricity security by operating in a load-following mode in several countries including France, Germany, Belgium, the Slovak Republic and Sweden," the IEA says. In the USA, nuclear output was down 4 TWh, or 2%, in Q1 2020, partly due to lower electricity demand linked to mild weather. China was one of the few regions with nuclear power growth, with a 1% increase in output between Q1 2019 and Q1 2020. This was attributed to the start-up of two new large reactors. The IEA says construction of several new reactors around the world is "likely to be pushed by a few months" as a result of the pandemic.
Global CO2 emissions were over 5% lower in Q1 2020 than in Q1 2019, mainly on an 8% decline in emissions from coal, 4.5% from oil and 2.3% from natural gas. Emissions are expected to decline even more rapidly across the remaining nine months of the year, to reach 30.6 gigatonnes for 2020 overall, almost 8% lower than in 2019. This would be the lowest level since 2010.
"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," said IEA Executive Director Fatih Birol. "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."
The report says governments will play a major role in shaping the energy sector's recovery from the COVID-19 crisis. "In particular, the design of economic stimulus packages presents a major opportunity for governments to link economic recovery efforts with clean energy transitions - and steer the energy system onto a more sustainable path. While the clean energy transitions and stimulus discussions are gathering momentum, a coordinated policy effort will be needed to harvest its opportunities and lead to a more modern, cleaner and more resilient energy sector for all."
World Nuclear Association Director General Agneta Rising said: "The IEA report is right to conclude that a coordinated policy effort will be needed to harvest its opportunities and lead to a more modern, cleaner and more resilient energy sector for all. Nuclear is cost-effective and will help delivers a faster and better clean energy transition that will provide high-valued jobs now and for a sustainable future."
