By Natalie Hughes
The COVID-19 pandemic has led to the biggest shock to the global energy system in 70 years. The IEA, or the International Energy Agency, announced recently that solar power is expected to surpass coal in total energy production by 2025. Furthermore, renewables may account for up to 80% of electrical energy growth demand by 2030. The news serves as a shock to many as coal has consistently maintained a 40% share of global electricity generation worldwide. Yet the demand for coal and oil has begun to plummet. While this shift is largely in part due to rising dependence on more eco-friendly alternatives, the COVID-19 pandemic also comes into play as a key contributor.
The IEA’s World Energy Outlook Report also reports that total global energy is expected to fall by 5% in 2020, in large part due to energy pullback from India. As oil remains low in priority for people quarantined at home, full lockdowns have driven a 20% fall in consumer electricity demand. Further, corporate spending on new oil and gas supplies is also instrumental. The pandemic has not only weakened corporate balance sheets, but has also given way to uncertainty surrounding their future fuel demand.
Despite declining energy usage overall, the past two years have only increased reliance on solar energy. It is becoming increasingly common for governments around the world to set projected standards for cutting emissions and reducing their nations’ dependence on fossil fuels. At the same time, solar projects are becoming progressively less expensive to install and maintain both on an industrial and personal scale. In fact, in some countries, solar is already cheaper than oil and gas. IEA Executive Director Dr. Fatih Birol even stated, "I see solar becoming the new king of the world's electricity markets.” Based on the track that our world is currently on, solar energy is set to make deployment records each year after 2022.
Dr. Fatih Birol also added, “It is still too early to determine the longer-term impacts, but the energy industry that emerges from this crisis will be significantly different from the one that came before.” While the longstanding effects of the pandemic on energy usage as a whole are still uncertain, officials and bystanders alike can all agree that, like many others, the energy industry will never be the same.