News Energy
Oil era not over for the time being
Global energy demand is down 5% this year as a result of the coronavirus pandemic. This is reported by the International Energy Agency (IEA). What impact will this have on the oil market and the development of renewable energy over the next 10 years?
The IEA released the World Energy Outlook 13 publication on Tuesday 2020 October. This shows not only that energy demand will fall by 2020% in 5, but also that global investment in energy is declining even more sharply: -18%. The positive side is that CO2 emissions as a result of the loss of energy demand also decrease. This is a decrease in global emissions of 7%, which is a record.
Yet that is not enough to turn the tide definitively, says IEA director Fatih Birol. "The economic recession is only temporarily suppressing CO2 emissions. Only faster, structural changes in the way we produce and consume energy can really break the emission trend." According to him, this requires decisive measures from governments.
Restore energy demand in 2023
Before the corona crisis, the IEA expected a 12% growth in energy demand over the next 10 years. That expectation has now been revised downwards. It is still about 4% to 9% growth, depending on the duration of the crisis. If we get those under control in the course of 2021, and the global economy recovers, world energy demand will be back to pre-crisis levels by early 2023. If the crisis lasts longer, this will not be the case until 2025.
This obviously has an impact on oil and gas prices. Among other things, the development of aviation and the degree of recovery after the crisis have an influence on this. The IEA expects that after the historic decline in 2020, oil demand will not return to pre-coronavirus levels until 2023 at the earliest. At the same time, the era of growing oil demand is approaching its end. Provided government policy is geared to this, rising oil demand will make way for the transition to renewable energy sources by 2030.
Demand for natural gas is less dependent on the current economic uncertainty and will therefore recover more quickly, the IEA predicts. This is especially influenced by the growing demand in Asia. Natural gas demand is expected to grow nearly 3% in 2021 and then rise to 2030% above pre-coronavirus levels by 14.
Renewable energy
The new IEA publication outlines 4 scenarios showing how the energy sector can develop over the next 10 years. Renewable energy plays a key role in all scenarios. Supportive policies and maturing technologies are increasing access. Renewable energy sources will provide 10% of global electricity demand growth over the next 80 years.
Birol also calls solar energy 'the new king of the electricity markets'. “Based on current government policies, solar is on track to set new records annually after 2022 in implementation. If governments and investors ramp up their clean energy efforts, the growth of both solar and wind would be even more spectacular. is encouraging to address the global climate challenge.”
Climate neutral in 2070
However, a significant effort still needs to be made to create a CO2-neutral world in 2050, as agreed in the Climate Agreement. These efforts should primarily focus on reducing emissions from existing energy infrastructure, such as coal-fired power stations and steel plants. Otherwise international climate goals will not be attainable, despite efforts in other areas.
Despite major challenges, a world of zero net emissions is getting closer. If countries and companies achieve their climate goals on time and in full, the world will be climate neutral by 2070, the IEA predicts. "To reach that point two decades earlier would require a series of drastically additional measures over the next 10 years."
Jeanette Pennings
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