Economics Current

Global Energy Review, 2020

In April 2020, the International Energy Agency (IEA)  released a report namely, Global Energy Review: 2020 which also included the impact of the Covid-19 crisis on global energy demand and CO2 emissions. In response to the exceptional circumstances stemming from the coronavirus pandemic, the annual IEA Global Energy Review expanded its coverage to include real-time analysis of developments in 2020 and possible directions for the rest of the year.
 
What is International Energy Agency?  IEA is an autonomous organisation, established in1973 after the OPEC cartel had shocked the world with a steep increase in oil prices. It works to ensure reliable, affordable and clean energy. It is headquartered in Paris, France.
 
Findings of Global Energy Review, 2020:
Beyond the immediate impact on health, the current crisis has major implications for global economies, energy use and CO2 emissions. The countries with full lockdown have been experiencing an average decline of 25% in energy demand per week, while in those with a partial lockdown, the fall in energy demand is about 18% per week. Global energy demand has declined by 3.8% in the first quarter of 2020 compared to the first quarter of 2019. Further, it is expected that 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.
 
·Global coal demand - hit the hardest, falling by almost 8% compared with the first quarter of 2019. Three reasons for this are: China – a coal-based economy – was the country the hardest hit by Covid‑19 in the first quarter; cheap gas and continued growth in renewables elsewhere challenged coal; and mild weather also capped coal use.
·Oil demand - also hit strongly, down nearly 5% in the first quarter, mostly by curtailment in mobility and aviation, which account for nearly 60% of global oil demand. 
·Gas demand - more moderate, at around 2%, as gas-based economies were not strongly affected in the first quarter of 2020.
·Renewables - the only source that posted a growth in demand, driven by larger installed capacity and priority dispatch.
·Electricity demand - significantly reduced as a result of lockdown measures, with knock-on effects on the power mix. Electricity demand has been depressed 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
 
India, which is one of the IEA association countries, has experienced a reduction in its energy demands by 30% as a result of the nation-wide lockdown. Moreover, in India, where economic growth and power production are slowing significantly, the demand for coal is expected to decline steeply. 



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