China was the first to implement containment measures, in mid-January, and experienced the world’s largest demand reduction in Q1 2020, of 6.5%.
Impacts were more limited in other parts of the world, where restrictions began in March and were introduced progressively. Electricity demand fell by 2.5% to 4.5% in Europe, Japan, Korea and the United States in Q1-2020 relative to Q1-2019.
Unprecedented demand drop
The decline is “unprecedented,” the IEA said, explaining that in absolute terms it is the equivalent of losing the entire energy demand of India, the world’s third largest energy consumer. Advanced economies will see the biggest declines, with demand set to fall by 9% in the United States and by 11% in the European Union.
“The impact of the crisis on energy demand is heavily dependent on the duration and stringency of measures to curb the spread of the virus,” the IEA executive director, Dr Fatih Birol said. Each month of worldwide lockdown at the levels seen in early April is found to reduce annual global energy demand by about 1.5%.
Shift to renewables
Lockdowns have changed power demand patterns, with consumption levels and patterns on weekdays looking like those of a pre-crisis Sunday. Full lockdowns have pushed down electricity demand by 20% or more, with lesser impacts from partial lockdowns. Electricity demand is set to decline by 5% in 2020, the largest drop since the Great Depression in the 1930s.
Simultaneously, the lockdowns are driving a shift to low-carbon energy sources which are set to extend their lead this year to reach 40% of global electricity generation – 6% ahead of coal. Electricity generation from wind and solar PV continues to increase in 2020, lifted by new projects that were completed in 2019 and early 2020.
Thermal power plants, meanwhile, finding themselves increasingly squeezed between low overall power demand and increasing output from renewables. As a result, the combined share of gas and coal in the global power mix is set to drop by 3% in 2020 to a level not seen since 2001.
Coal demand is projected to fall by 8%, while gas demand is seen on track to decline 5% in 2020 - the first year of decline after a decade of uninterrupted growth.
Emissions set to plunge
As a result of declining coal and oil use – global energy-related CO2 emissions are set to fall by almost 8% in 2020. This would be the largest decrease in emissions ever recorded – nearly six times larger than the previous record drop of 400 million tonnes in 2009 that resulted from the global financial crisis.
“Resulting from premature deaths and economic trauma around the world, the historic decline in global emissions is absolutely nothing to cheer,” Dr Birol said. “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.”
The IEA head called on governments to learn from that experience by putting 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,” he said, “and steer the world towards a more resilient and cleaner energy future.”