IEA says oil producers may struggle to gauge demand amid second wave

‘The king of electricity’: Solar outshines other power sources

The International Energy Agency expected that the production of solar energy will lead to an increase in the supply of electricity from renewable sources in the next decade, as renewable energy is expected to account for 80% of the growth in electricity generation worldwide, under the current circumstances, describing solar energy as becoming the new king of the markets.

Nonetheless, the COVID-19 pandemic already fuelled some changes, with renewables set to be the only energy source expected to grow in 2020, it added. "Our assessment is that global energy demand is set to drop by five percent in 2020, energy-related Carbon dioxide emissions by seven percent, and energy investment by 18 percent".

Meanwhile, power produced from solar photovoltaics has become cheaper than electricity from plants fired by fossil fuels in most nations.

Predicting the future of energy is an even greater challenge than usual this year, coming after what the IEA described as a disruption not seen since 'World Wars and the Great Depression.

In order to reach the target by 2050, there would need to be a 40pc reduction in emissions by 2030, with low-emission sources providing almost 75pc of global electricity generation by the end of this period. Hydropower remains the largest renewable source, but solar is the primary source of growth, followed by onshore and offshore wind.

The IEA's report said that electricity costs from large-scale solar photovoltaic installations had dropped significantly from 38 cents per kilowatt-hour in 2010 to 6.8 cents per kilowatt-hour a year ago.

"The era of global oil demand growth will come to an end in the next decade", said Fatih Birol, executive director of the IEA.

Maturing technology and government support mechanisms have cut financing costs for major solar PV projects, the IEA said, helping to bring down output costs overall.

If Covid-19 recovery happens in 2021, coal demand will continue to fall.

'In the absence of a larger shift in policies, it is still too early to foresee a rapid decline in oil demand, the report said. Coal is forecast to fall below 20% of the global energy mix by 2040 for the first time since the Industrial Revolution.

"Only faster structural changes to the way we produce and consume energy can break the emissions trend for good", he said.

The report predicts that if now announced policy intentions and targets remain in place, global energy demand will rebound to pre-crisis levels in early 2023 - however, it forecasts this will not happen until 2025 in the Delayed Recovery Scenario, which imagines a "prolonged pandemic and deeper slump".

"Governments have the capacity and the responsibility to take decisive actions to accelerate clean energy transitions and put the world on a path to reaching our climate goals, including net-zero emissions", Dr Birol said.

McConville pointed to recent Australian government figures, which showed that liquefied natural gas (LNG) exports have the potential to reduce global greenhouse gas emissions by up to 169-million tonnes carbon equivalent, or over 30% of Australia's annual emissions.

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