IEA says the coronavirus crisis has set in motion the largest drop of global energy investment in history

Must Read

Yellowtail could add another 220,000 bpd to Guyana output, 7 floaters on the cards – Hess

Though the Hammerhead area was targeted for the fourth development project in the Stabroek block offshore Guyana,...

Pompeo discusses leveraging Guyana’s wealth of natural resources with President Ali

Shortly after arriving in Guyana on Thursday, U.S. Secretary of State Michael R. Pompeo met with President Irfaan Ali, during...

2020 expected to be a ‘one and done’ recession as oil demand bounces back – API

The enormous challenges triggered by the COVID-19 pandemic this year have caused major disruptions to the global...
OilNOW
OilNow is an online-based Information and Resource Centre which serves to complement the work of all stakeholders in the oil and gas sector in Guyana.

The International Energy Agency believes the coronavirus pandemic has paved the way for the largest decline of global energy investment in history, with spending set to plummet in every major sector this year, CNBC said in a reported on Wednesday.

In the group’s annual World Energy Investment report, published on Wednesday, the IEA said that the unparalleled decline in worldwide energy investment had been “staggering in both its scale and swiftness.”

It warned the economic impact of the public health crisis could have “serious” implications for energy security and clean energy transitions.

“The historic plunge in global energy investment is deeply troubling for many reasons,” Fatih Birol, executive director at the IEA, said in a statement.

“It means lost jobs and economic opportunities today, as well as lost energy supply that we might well need tomorrow once the economy recovers,” he continued. “The slowdown in spending on key clean energy technologies also risks undermining the much-needed transition to more resilient and sustainable energy systems.”

Global spending on electricity set to overtake oil

To date, more than 5.5 million people across the globe have contracted the coronavirus, with over 346,700 deaths, according to data compiled by Johns Hopkins University.

The pandemic has meant countries have effectively had to shut down, with world leaders imposing draconian measures on the daily lives of billions of people.

The stringent restrictions, which have brought world travel close to a standstill, are expected to result in the worst economic downturn since the Great Depression in the 1930s.

At the start of 2020, the IEA said global energy investment was on pace for growth of around 2%, reflecting the largest annual rise in spending in six years.

But, after the Covid-19 crisis brought large swathes of the world economy to a halt in a matter of months, the IEA said it now expects global investment to tumble by 20% compared to last year.

To be sure, that’s a fall of nearly $400 billion year-on-year.

Meanwhile, the Paris-based energy agency said a combination of falling demand, lower energy prices and a rise in cases of non-payment of bills means that energy revenues going to governments and industry are set to fall by “well over” $1 trillion in 2020.

Oil accounts for most of this decline, the group continued, adding that, for the first time, global spending on oil was set to fall below the amount spent on electricity.

“Electricity grids have been a vital underpinning of the emergency response to the health crisis — and of economic and social activities that have been able to continue under lockdown,” the IEA’s Birol said.

“These networks have to be resilient and smart to ward against future shocks but also to accommodate rising shares of wind and solar power. Today’s investment trends are clear warning signs for future electricity security,” he added.

‘Lower emissions but for all the wrong reasons’

The overall share of global energy spending that goes to so-called clean energy technologies, such as renewables, efficiency, nuclear and carbon capture, utilization and storage, has been “stuck” at around one-third in recent years, the IEA said.

In 2020, it will jump toward 40%, they continued, before quickly dashing the hopes of climate activists hoping this could reflect a permanent change.

“In absolute terms, it remains far below the levels that would be required to accelerate energy transitions,” the group said.

“The crisis has brought lower emissions but for all the wrong reasons. If we are to achieve a lasting reduction in global emissions, then we will need to see a rapid increase in clean energy investment,” the IEA’s Birol said.

“The response of policymakers — and the extent to which energy and sustainability concerns are integrated into their recovery strategies — will be critical.”

Birol said the IEA planned to provide clear recommendations for how governments can quickly create jobs and spur economic activity by building cleaner and more resilient energy systems in an upcoming report.

Source: CNBC

- Advertisement -

Latest News

2020 expected to be a ‘one and done’ recession as oil demand bounces back – API

The enormous challenges triggered by the COVID-19 pandemic this year have caused major disruptions to the global...

Yellowtail could add another 220,000 bpd to Guyana output, 7 floaters on the cards – Hess

Though the Hammerhead area was targeted for the fourth development project in the Stabroek block offshore Guyana, the high quality oil discovered...

Pompeo discusses leveraging Guyana’s wealth of natural resources with President Ali

Shortly after arriving in Guyana on Thursday, U.S. Secretary of State Michael R. Pompeo met with President Irfaan Ali, during which the two leaders discussed...

Department of Energy remains operational, actively involved in Payara negotiations – Vickram Bharrat

Guyana’s Minister of Natural Resources, Vickram Bharrat, told Members of Parliament on Tuesday that the Department of Energy (DE) remains operational and...

Saudi Arabia denounces OPEC+ members trying to cheat oil quota

(Bloomberg) --Saudi Arabia showed its determination to stop OPEC+ members cheating on their production quotas, delivering a thinly veiled dressing-down to its...

More Articles Like This