Declining energy demand and emissions
According to a recent International Energy Agency (IEA) report Covid-19 will wipe out demand for fossil fuels. Year over year demand for gas is expected to fall by 5 percent, and demand for coal is forecast to fall by 8 percent. Global energy demand will decrease by 6 percent and in advanced economies like the EU demand is expected to fall by 11 percent while U.S. oil demand is expected to experience a 9 percent decline.
In addition to a wealth of environmental benefits Covid-19 is driving down emissions. As reported by The Guardian, countries that have imposed strict lockdowns have seen a 25 percent drop in week-to-week energy demand and a 25 percent reduction in carbon emissions. In 2020 we may see a 2.5 billion tonne decrease in carbon emissions. The IEA predicts the reduction in fossil fuel demand is expected to lead to a 2.6 gigatons or 8 percent decline in global carbon emissions in 2020 compared with 2019. This is a drop six times larger than the record fall after the financial crisis in 2009. The financial crisis of 2020 will result in a decline in atmospheric carbon that is bigger than the combined reductions of every financial crash since the second world war.
Electricity generated by fossil fuels accounts for one quarter of global carbon emissions. As quoted by The Guardian, Rob Jackson, the chair of Global Carbon Project said: "The drop in emissions is global and unprecedented."
The fall of fossil fuels
Covid-19 may be a nail in the coffin of the fossil fuel industry but dirty energy was dying before the outbreak of this modern day plague. According to the IEA low oil prices are here to stay. The fossil fuel industry is in decline due to market realities and their once vaunted position has been decimated by revelations about the corruption and deceit. This is evident in polls that show their disinformation efforts are faltering. More recent polls suggest that the coronavirus may be helping people to acknowledge the threat posed by the climate crisis.
The pollution generated by the fossil fuel industry is deadly killing at least seven million people annually. Such pollution also makes us more vulnerable to respiratory diseases including Covid-19. This is fueling popular outcries against dirty energy powered political corruption. The dangers of fossil fuels are also contributing to an unrelenting divestment movement. From storage systems to supply chains, the dangers of transporting fossil fuels are among the weaknesses being exposed by this pandemic.
Renewable energy challenging fossil fuels
This is the biggest decline in energy use since the Great Depression almost a century ago. It is important to note that not all sources of energy will be equally effected. The fossil fuel industry will continue to suffer the brunt of this energy tsunami. While almost every sector of the economy will be pummeled by the forthcoming economic recession, low prices will drive many oil companies into bankruptcy while renewables are expected to keep growing. While global demand for oil has already fallen by 5 percent this year, the IEA indicates that we can expect to see a 5 percent increase in global use of renewable electricity in 2020. In 2020 renewable energy is expected to account for almost one third (30%) global electricity demand.
Long before the coronavirus, renewable energy was gaining ground on fossil fuels. The Covid-19 pandemic has expedited the transition away from dirty energy to renewables. Despite massively disproportionate subsidies for oil and gas clean energy continues to narrow the gap. In 2019, renewable energy accounted for 72 percent of new energy sources. Although the Trump administration has slowed growth, renewable energy is expected to account for more than one fifth of electricity produced in the U.S. in 2020. This represents a doubling of clean power production in the last decade.
All around the world clean energy projects have benefited from government efforts to address climate change. This has driven down prices to the point where renewables are now competitive with fossil fuels. In many parts of the world electricity generated by wind and solar are cheaper than natural gas and coal. While oil prices have plummeted natural gas and coal prices have not seen similar price declines.
Improving efficiency, declining costs and modular battery technology are all coming together to make the case for renewable energy over fossil fuels. Scaling renewables and battery technology will further reduce costs and make them increasingly efficient and affordable. The more they grow the more economies of scale will make these technologies even more competitive. Renewable energy has other major advantages over fossil fuels, they can be built fairly quickly and generate power locally foregoing the need for transmission infrastructure. Renewable energy is also far more resilient to economic swings.
Renewable energy will survive and thrive
Renewable energy has grown prodigiously, however the sector is not immune to the global slowdown. According to the Solar Energy Association the coronavirus could result in a 33 percent reduction in the 19 gigawatts of new solar capacity that were expected this year and up to half of the quarter million solar workers could be temporarily furloughed.
As reported by the New York Times, Wood Mackenzie, an energy research and consulting firm, thinks these estimates may be overly pessimistic. "Renewables are on a growth trajectory today that I think isn’t going to be set back long term," said Dan Reicher, the founding executive director of the Steyer-Taylor Center for Energy Policy and Finance at Stanford University. "This will be a bump in the road."
Renewables have consistently exceeded expectations. "We blew through all of the projections," said Caton Fenz, chief executive of ConnectGen, a wind, solar and electricity-storage developer based in Houston. "We’re surfing a long-term wave," he said. "We just can’t get specific things done because of the pandemic, but I don’t think that affects the broader trajectory." In 2019 solar capacity increased 23 percent compared to 2018 adding 13.3 gigawatts, exceeding natural-gas generation.
In a recent report Raymond James analysts estimated that renewable energy sources would provide 20.7 percent of U.S. electricity this year. They believe that utilities may try to get more electricity from renewable energy due to this pandemic.
"We believe, over the long run, we are well positioned to outcompete incumbent generators," said Abigail Hopper, president of the Solar Energy Industries Association.
The opportunity of a lifetime
Any effort to address climate change must include serious efforts to curtail our use of fossil fuels. Fossil fuel advocates have deep pockets and powerful political allies. Based on their past behavior, the industry cannot be expected to go quietly and they will likely use all the tools at their disposal to resist the transition. However, Covid-19 presents us with an opportunity to challenge their dominance.
"The virus provides a glimpse of just how quickly we could clean our air with renewables," the chair of the Global Carbon Project said, but he warned of the "need for systemic change in our energy infrastructure, or emissions will roar back later." We have reason to be concerned that bailouts directed towards the oil and gas industries could undermine renewable energy's superior positioning. "This is a historic shock to the entire energy world. Amid today’s unparalleled health and economic crises, the plunge in demand for nearly all major fuels is staggering, especially for coal, oil and gas. Only renewables are holding up during the previously unheard-of slump in electricity use," said Dr Fatih Birol, the IEA Executive Director. "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."
The coronavirus has given us an opportunity to alter our energy equation and avert a climate catastrophe. Renewable energy is vital to our future. This is the key point in a Los Angeles Times editorial titled, "Renewable energy must be the future, if we are to have one at all." As the author Scott Martelle said, it’s now or never.
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