Against the backdrop of COVID-19 impacts on the global energy demand and CO2 emissions, International Energy Agency (IEA) has just published its global Energy Review, taking into consideration the real time situation of the past three months from January to March 2020. Not to speak of the under developed or the developing nations, most of the developed and developing nations including USA, UK, Spain, Italy, Germany, France, Russia, China, Brazil and India are struggling to contain and confront the pandemic. Death toll is rising and infections are spreading fast. As of 20 May 2020, the number of confirmed cases were 4,980,766 and death toll was 324,446. The economic superpower USA is suffering the most with 1,569,919 confirmed cases and 96,463 deaths. The top 10 affected countries are USA, Russia, Spain, Brazil UK, Italy, France, Germany, Turkey and Iran. China where the first outbreak of COVID-19 was recorded at Wuhan in Hubai province now stands at 11the. Massive shutdown, lockdown of cities and countries, suspension of inter and intra country air travels, restrictions on movements of road, rail and riverine traffics, closures of mills, factories and industries drastically reduced the demand of crude oil and petroleum products. Global oil market crashed unbelievably below zero for a while. So did the price of all linked fuel including LNG and LPG. The global market became over-supplied creating huge challenges for the economy of top oil and gas rich and exporting countries. Lesser use of fossil fuel has remarkably reduced CO2 and GHG emissions. The air is cleaner, landscape is greener, birds, animals and aquatic animals are having sigh of relief. IEA in its review has taken all these into considerations. The pandemic management situation is still not clear. The exact nature of the coronavirus has not yet been accurately established. No specific medicine or vaccine has also been developed. It may take 12-18 months before a certified approved vaccine may be available. The uncertainty surrounding public health, the economy and hence energy over the rest of 2020 is unprecedented. The IEA analysis in such a situation has not only charted a possible path for energy use and CO2 emissions in 2020 but also highlighted the many factors that could lead to differing outcomes. The review tried to explore ways to navigate the once-in-a-century pandemic.
COVID -19 Depleted Demand
According to IEA, COVID-19 in its ferocity and speed has surpassed all other health crisis in the recent past after Spanish Flue of the past century. Three millions of confirmed cases and over 200,000 deaths have been recorded in 212 countries while completing the IEA report by late April 2020. Affected countries in their efforts for slowing down the spread of virus closed airports for both international and domestic flights, closed mills, factories, industries, shopping malls and markets. Consequently, energy use drastically reduced from 5% in mid-March to 50% in mid-April. For relieving the stress of economies, Western European countries and USA announced their intentions to reopen parts of the economy from the middle to end May. April 2020 may remain as the month hardest ever hit by the pandemic.
The IEA also observed that the current crisis has major implications for global economies, energy use and CO2 emissions. Data through mid-April 2020 shows that countries in full lockdown experienced an average 25% decline in energy demand per week and countries in partial lockdown an average of 18% decline. IEA collected the daily demand of 30 countries until April 14, representing over two-thirds of global energy demand. The data evidenced that demand depression depended on duration and stringency of lockdowns. Global energy demand declined by 3.8% in the first quarter of 2020, with most of the impact felt in March as confinement measures were enforced in Europe, North America and elsewhere.
Global coal demandfell almost 8% compared with the first quarter of 2019. China– a coal-based economy – was the country the hardest hit. The cheap gas and continued growth in renewables elsewhere challenged coal; and mild weather also capped coal use. Oil demand also went down nearly 5% in the first quarter. This is mostly due to curtailment in mobility and aviation, which account for nearly 60% of global oil demand. By the end of March, global road transport activity was almost 50% below the 2019 average and aviation 60% below. The impact of the pandemic on gas demand was minimum, at around 2%. Consequently, gas-based economies were not strongly affected in the first quarter of 2020. Renewable energy appeared to be the only source that recorded a growth in demand, driven by larger installed capacity and priority dispatch.
Electricity demand has been significantly reduced due to lockdown measures. This created knock-on effects on the power mix. Electricity demand reduced by 20% or more during periods of full lockdown in several countries, as upticks for residential demand are far outweighed by reductions in commercial and industrial operations. Demand reductions have lifted the share of renewables in the electricity supply, as their output is largely unaffected by demand. Demand fell for all other sources of electricity, including coal, gas and nuclear power.
In the context of above fuel demand scenario due to COVID-19, IEA explored the most likely scenario for the entire 2020. This energy impacts quantified, of a widespread global recession caused by prolonged restrictions on mobility, social and economic activity. In the reviewed scenario, the recovery from depletion caused by lockdown recession is predicted as gradual. This would also be caused by substantial permanent loss in economic activity. The analysis evidenced that energy demand reduced by 6%, the largest in 70 years in percentage terms and the largest ever in absolute terms. The impact of COVID-19 on energy demand in 2020 would be more than seven times larger than the impact of the 2008 financial crisis on global energy demand.
Impact on Primary Fuel Use
Oil demand could drop by 9%, or 9 mb/d on average over the year. Coal demand could decline by 8%, in large part because electricity demand will be nearly 5% lower over the course of the year. The recovery of coal demand for industry and electricity generation in China could offset larger declines elsewhere. Gas demand could fall much further across the full year than in the first quarter, with reduced demand in power and industry applications. Nuclear power demand would also fall in response to lower electricity demand. Renewables demand is expected to increase because of low operating costs and preferential access to many power systems. Recent growth in capacity, some new projects coming online in 2020, would also boost output. IEA predicted global electricity demand fall by 5%, with 10% reductions in some regions. Low-carbon sources would outstrip coal-fired generation globally.
Positive Impact on Emissions
Global CO2 emissions are expected to decline by 8%, or almost 2.6 gigatonnes (Gt), to levels of 10 years ago. Such a year-on-year reduction would be the largest ever, six times larger than the previous record reduction of 0.4 Gt in 2009 – caused by the global financial crisis – and twice as large as the combined total of all previous reductions since the end of World War II. As after previous crises, however, the rebound in emissions may be larger than the decline, unless the wave of investment to restart the economy is dedicated to cleaner and more resilient energy infrastructure.
Conclusion
Most of the countries are still grappling with options in managing the COVID-19 contaminations. Some major affected countries could bring the rate of contamination within control. Some countries started relaxing the lockdown and resuming the economic activities. But in some countries a second wave of avalanche cannot be ruled out. Two leading power – USA and Russia – still appears undone. In any case, the world energy landscape may not recover in less than two years at least. Coal and oil may no longer remain major fuel of choice. The world may lean towards renewables much more seriously. Natural gas and LNG may become the interim transition fuel. Hydrogen fuel may appear as supplementary fuel. The world will have to spend more and more on health care system, medical education, hospitals. Managing CO2 and GHG emissions would get greater priority attention. Energy efficiency and conservation would become essential for minimizing costs. Developing countries like Bangladesh must review their power and energy sector plans, cutting costs and letting the right professionals leading the sectors.
