IEA: Demand for Fossil Fuels Will Be Wiped Out by COVID-19

The International Energy Agency (IEA) claims that only renewable energy will be able to withstand the shock to the energy industry caused by the COVID-19 crisis.

The world’s energy watchdog says that there will be a fall in the demand for energy equivalent to seven times the drop prompted by the global financial crisis over a decade ago.

The demand for fossil fuels will subsequently collapse as a result of an overall drop in demand for energy.

The IEA published a report outlining how the energy industry will experience the greatest fall in demand since the second world war. Renewable energy sources will continue to experience growth, whereas oil, coal, and gas will all experience multi-decade lows.

Electricity will play a significant part in the global energy system within the coming year, helping to counteract several years’ worth of growth for carbon emissions globally.

The IEA’s executive director, Fatih Birol said: “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.”

Renewable energy sources are expected to make up almost 30% of the global demand for electricity this year - a growth of 5%.

According to Birol, the growth of renewables during a crisis may inspire companies to generate more clean electricity.

However, Birol also warns that governments should also focus on greener energy when putting together stimulus packages for economic recovery after the coronavirus crisis.

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

The COVID-19 pandemic has ignited a crisis within the fossil fuel industry, with oil market prices collapsing to the point where they turned negative a few weeks ago.

The restrictions to travel in the global effort to control the spread of coronavirus has led to the biggest drop in the demand for oil in a quarter of a century.

After a decade of steady growth, there is a 5% fall anticipated for the demand in gas, and coal is expected to register an 8% fall in comparison with 2019.

The IEA expects the overall demand for energy to fall by 6% during 2020 - which equates to the combined demand of the UK, Italy, France, and Germany.

Global emissions could fall by up to 8% in comparison with 2019 - six times greater than the fall experienced after the global financial crisis.