Renewable Technology Will Take Starring Role As Energy Recovers From Covid-19
The global energy system is in a state of upheaval, thanks to the Covid-19 pandemic, which has “caused more disruption than any other event in recent history, leaving scars that will last for years to come,” says the International Energy Agency (IEA) in its latest World Energy Outlook (WEO).
“But whether this upheaval ultimately helps or hinders efforts to accelerate clean energy transitions and reach international energy and climate goals will depend on how governments respond to today’s challenges,” the report adds, suggesting that the next decade will be pivotal to both recovering from the current crisis and to tackling climate change.
Global energy demand is set to drop by 5% in 2020, with energy-related CO2 emissions down by 7% and investment in the sector 18% lower than the previous year as the pandemic-induced lockdowns around the world depress economic activity. Global energy demand will not return to pre-crisis levels until 2023 under current policy intentions and targets, or 2025 in the event of a prolonged pandemic and deeper slump.
Slower demand growth will keep oil and gas prices lower than before the crisis, while the drop-off in investment increases the risk of future market volatility.
“Renewables take starring roles in all our scenarios, with solar centre stage,” the WEO states, adding that “solar projects now offer some of the lowest cost electricity ever seen”. Supportive policies and maturing technologies are enabling very cheap access to capital in leading markets and solar PV is now consistently cheaper than new coal- or gas-fired power plants in most countries.
In the Stated Policies Scenario, renewables meet 80% of global electricity demand growth over the next decade. Hydropower remains the largest renewable source, but solar is the main source of growth, followed by onshore and offshore