The coronavirus pandemic is expected to cut global energy demand by 6% overall in 2020 compared with 2019, the International Energy Agency has said.
By sector, oil demand is likely to drop by 8% year on year in 2020, while natural gas demand was expected to fall 4% and coal demand slide 8%, it said.
Nuclear power output is expected to be down 2.5% in 2020, while electricity demand will likely fall 5% overall, and up to 10% in some areas, it said.
As a result, investment in the energy sector in 2020 will experience its largest decline on record with a reduction of 20% — almost $400 billion — in capital spending compared with 2019, the IEA said.
As economies recover from these massive demand impacts, governments can help steer the private sector to make investment choices that will support growth, jobs and long-term climate objectives, it said.
The IEA’s recovery plan can add 1.1 percentage points to global economic growth each year, and save or create about 9 million jobs per year over the next three years, if governments choose to follow the non-governmental agency’s advice, it said.
“It would also bring lasting benefits to the global economy because investment in new infrastructure, such as electricity grids and more energy efficient buildings and industries, would improve the overall productivity of both workers and capital,” it said.
In addition, the IEA’s plan would cut global energy-related GHG emissions by 4.5 billion mt of CO2 equivalent by 2023 compared with where they would otherwise be, it said.
The plan would also make 2019 the definitive peak in global emissions, and put them on a path toward achieving long-term climate goals, including the Paris Agreement, it said.
“The Sustainable Recovery Plan is not intended to tell governments what they must do. It seeks to show them what they can do,” the IEA said.
The IEA’s report — produced in collaboration with the International Monetary Fund — sets out how governments can deliver resilient and clean energy projects that are “shovel-ready,” including a strong pipeline of new projects and tailored support for distressed industries such as the auto sector.