IEA believes COVID-19 crisis will wipe out demand for fossil fuels

According to the world's energy watchdog, the International Energy Agency (IEA), renewable electricity will be the only source able to overcome the biggest global energy shock in 70 years, triggered by the coronavirus pandemic.

In a report the IEA have said the outbreak of COVID-19 would wipe out demand for fossil fuels by prompting a collapse in energy demand seven times greater than the slump caused by the global financial crisis. The most severe plunge in energy demand since the second world war would trigger multi-decade lows for the worldwide consumption of oil, gas and coal, while renewable energy can continue to grow.

The rise of renewable energy combined with the declining demand for fossil fuels means clean electricity will play its largest ever role in the global energy system this year, and will help to combat a growth of global carbon emissions over the last ten years. Fatih Birol, the IEA's executive director, 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".

According to Birol, renewable energy is expected to grow by 5% this year, making up almost 30% of the world's decreasing demand for electricity. Despite the pandemic, the growth of renewables could persuade fossil fuel companies towards their goals in generating cleaner energy, but governments should also include clean energy at the heart of economic stimulus packages to ensure a green recovery.

He claims it is 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 impact of COVID-19 has:

• triggered a crisis for fossil fuel commodities, including the collapse of oil market prices;
• led to severe restrictions on travel and the global economy that will cause the biggest drop in global oil demand in 25 years;
• expected to reduce the demand for gas by 5%, after ten years of uninterrupted growth;
• meant that coal demand is forecast to fall by 8% compared with 2019, its largest decline since the end of the second world war.

The IEA used data from every country and across each energy sector to analyse the impact of the pandemic on the global system. It found that global energy demand was likely to plummet by 6% this year. The impact of the pandemic on energy use will be felt most in advanced economies where demand is expected to fall by 11% across the EU and 9% across the US. The collapse of fossil fuel demand could lead global emissions to fall by 8% compared with 2019.

For more information, see:

• Global Energy Review 2020.