Global Energy Review 2020

Accelerating Covid-19 vaccine rollouts in several major economies and extensive budgetary reactions to the economic crisis are improving the prognosis for economic growth and pointing to a resurgence in energy demand in 2021. The paper investigates whether the recovery in activity risks driving CO2 emissions to a new high and how new policies aimed at a sustainable recovery can prevent a rebound in emissions.

 The pace of global vaccination rollouts, the potential appearance of new Covid-19 virus strains, and the extent and efficiency of economic stimulus measures are significant unknowns for the prognosis. As a result, this research plots a possible route for energy consumption and CO2 emissions in 2021 and illustrates the numerous factors that might result in different outcomes.

Aside from its direct impact on health, the present issue has far-reaching repercussions for global economies, energy consumption, and CO2 emissions. According to our examination of daily data through mid-April, nations in complete lockdown are enjoying a 25% weekly decrease in energy consumption, while those in partial lockdown are experiencing an 18% weekly decline.

Daily data gathered for 30 nations till 14 April, representing more than two-thirds of worldwide energy consumption, reveal that demand depression is affected by the duration and severity of lockdowns.

Global Energy Scenario consumption fell by 3.8 percent in the first quarter of 2020, with most of the impact seen in March when Europe imposed restrictions along with North America and elsewhere.

• Global coal consumption was the most significant impact, falling by nearly 8% compared to the first quarter of 2019. Three factors came together to explain this decline. In the first quarter, China — a coal-based economy – was the worst hurt by Covid19; cheap gas and steady expansion in renewables abroad threatened coal, and mild weather further limited coal consumption.
• Oil consumption was also severely impacted, falling over 5% in the first quarter, owing primarily to reductions in mobility and aviation, which account for roughly 60% of global oil demand. By the end of March, worldwide road transport activity was about 50% lower than the 2019 average, while aviation activity was 60% lower.
• The pandemic’s impact on gas consumption was relatively mild, at roughly 2%, because gas-based economies were not adversely affected in the first quarter of 2020.
• Renewables were the only source that saw increased demand, owing to increased installed capacity and priority dispatch.
•     Due to lockdown measures, electricity demand has been drastically lowered, affecting the power mix. During periods of total lockdown, electricity consumption has been reduced by 20% or more in numerous nations since increases in household demand is significantly offset by decreases in commercial and industrial activity. 

For weeks, the demand curve resembled that of a long Sunday. Because their output is generally unaffected by demand, demand decreases have increased the percentage of renewables in the electrical supply. Demand for all other electrical sources, including coal, gas, and nuclear, dropped, and since it fell, operational, maintenance, and safety expenditures are prioritized to cope with these challenging times.

Due to such conditions, the energy consumption dropped by a whopping 6%, it’s the highest drop in percentage terms after 70 years and is the largest-ever drop in absolute terms. It is said that the impact of the Covid19 on the Global Energy Scenario in 2020 would be more than seven times the impact of the 2008 financial crisis. Since the whole of the world will suffer, the Indian Energy Scenario is also not looking good.

All fuels will be affected:

• Oil demand might fall by 9%, or 9 mb/d, bringing consumption back to 2012.
• Coal consumption might fall by 8% due to a 5% drop in power demand. China’s resurgence in coal consumption for industry and electrical generation might compensate for more considerable decreases elsewhere.
• Gas consumption might decline even more this year than in the first quarter due to lower demand for power and industrial uses.
• Nuclear power consumption would decrease as a result of reducing electricity demand.
•     Demand for renewables is predicted to rise because of cheap operating costs and privileged access to many electricity grids. Recent capacity expansion and specific new projects set to come online in 2020 would improve output.

Conclusion

Compared to 10 years ago, the Global Energy Scenario is predicted to fall by 8%, or over 2.6 gigatonnes (Gt). A decline of this magnitude is the highest ever and even six times more than the last recorded reduction of 0.4 Gt in 2009, which was triggered by the global financial crisis and is expected to be twice as large as the whole of the drops since world war II. This will also affect the Indian Energy Scenario as a whole. And due to this, everyone should just focus on operational, maintenance, and safety expenditures.

However, unless the surge of investment to restart the economy is directed to cleaner and more robust energy infrastructure, the recovery in emissions may be greater than the decrease, as it has been in prior crises.