How might Covid-19 reshape the energy sector? Will it stall or accelerate clean energy transitions? On 22 October 2020, International Energy Agency’s Division Head Tim Gould tackled these questions in his presentation on the agency’s recently released annual flagship publication, the World Energy Outlook (WEO).
The Paris School of International Affairs’ (PSIA) Dean Enrico Letta introduced Gould while International Energy Master Scientific Advisor Giacomo Luciani and faculty member Coby Van Der Linde facilitated the discussion. The presentation of the highly-anticipated WEO in collaboration with PSIA honored an annual tradition established in light of Sciences Po students’ and alumni’s continuous contribution to the outlook.
Yet this year’s findings and predictions turned out to be anything but traditional. Here are key takeaways:
- It is still to be determined if the pandemic will cause a setback in the transition to a more secure and sustainable energy system or if it will catalyse change. In any case, global carbon emissions are expected to rebound more slowly than after the financial crisis of ‘08 and ‘09. If the pandemic lasts beyond 2021, it would usher the slowest decade of energy demand growth for a century.
- The demand for renewable energy has increased with solar power (the new “king of electricity”) taking the lead. However, access to electricity in developing countries has stalled and investment in grids could be at risk, especially given their role as the “bedrock” of the electricity system and importance in the clean energy transition.
- The pandemic has compromised oil and gas revenues and investment. Oil demand is down by 8% and investment in oil and gas supply is down by approximately one third. Oil and gas producers face pressure to reassess their strategies in line with policy shifts. The WEO anticipates that coal will not rebound post-crisis.
- In order to reach net-zero emissions globally by 2050, governments, companies, investors, and citizens need to take drastic actions between 2020 and 2030 (increasing carbon capture utilisation storage, new nuclear capacities, low carbon hydrogen, use of electric cars, investment in clean electricity technologies, etc.).
Although the actions of all actors matter to achieve an energy transition, Gould emphasised that changes at the government-level matter most of all.
“There are no shortcuts. It is only profound changes guided by good policies that can deliver a better energy system,” he said.
Watch the full presentation of the WEO on replay below: