IEA: Coronavirus Response Can Reshape Future of Energy

The world’s response to Covid-19 can “reshape the future of energy” for years to come, the International Energy Agency said Tuesday in its annual World Energy Outlook report.
The IEA report underscored that most important of all is how the crisis will ultimately affect the transition to clean energy, CNBC reported.
The report noted that while the clean energy transition continues to gain momentum, faster and bolder structural changes are needed if the world is to reach net-zero carbon emissions.
“The Covid-19 crisis has caused more disruption than any other event in recent history, leaving scars that will last for years to come,” the Paris-based agency said in a statement. 
“Covid-19 unleased a crisis of exceptional ferocity on countries around the world ...The crisis is still unfolding today — and its consequences for the world’s energy future remain highly uncertain.”
Going forward, IEA believes that renewables will take “starring roles,” and solar will take “center stage,” driven by supportive government policies and declining costs.
“I see solar becoming the new king of the world’s electricity markets,” said Fatih Birol, IEA’s executive director. “Based on today’s policy settings, it is on track to set new records for deployment every year after 2022.”
On the other hand, IEA forecasts that coal demand will not return to pre-coronavirus levels, and that it will account for less than 20% of energy consumption by 2040, for the first time since the Industrial Revolution. 
Oil will remain “vulnerable to the major economic uncertainties resulting from the pandemic,” with demand starting to decline after 2030, the agency said.
Due to the ongoing impacts of Covid-19, the IEA expects global energy demand to fall by 5% in 2020, with oil and coal consumption falling 8% and 7%, respectively.
Natural gas demand is expected to decline by 3% this year — the largest decline since it became a major source of fuel in the 1930s — but the agency sees an uptick in demand over the next decade driven by growth from emerging economies. The outlook has been revised slightly since April, when the agency predicted energy demand could drop 6% in 2020.
As is customary, the report outlined the impacts of several different scenarios rather than just one given the number of variables in flux. But in a departure from recent years, the IEA chose to focus more heavily on the pivotal next 10 years.
Under the “Stated Policies Scenario,” Covid-19 will be brought under control in 2021 and energy demand will rebound to its pre-crisis level in 2023, while the “Delayed Recovery Scenario” models a slower economic recovery from the pandemic, with energy demand not rebounding until 2025.
“It is too soon to say whether today’s crisis represents a setback for efforts to bring about a more secure and sustainable energy system, or a catalyst that accelerates the path of change,” the report said.
The only energy source expected to grow this year is renewables.