‘Global energy demand could suffer largest decline in 70 years’

Global energy demand is set to fall by six percent in 2020, the largest in 70 years, due to the coronavirus pandemic, an expert with the International Energy Agency has said.

There could be a six percent reduction in total global energy demand in 2020 compared to 2019 as a result of coronavirus-related lockdowns, Peter Fraser, head of gas, coal and power markets at IEA, said during a webcast seminar hosted by IEA and non-profit Electric Power Research Institute.

But not every fuel is going to be affected in the same way, Fraser said, with fossil fuels impacted more than non-fossil fuels, according to S&P Global Platts.

He said the international energy market watchdog estimated there will be a significant decline in coal demand because of impacts on developing economies and relatively low natural gas prices in more advanced economies.

“The combination of those two factors are really hitting coal very hard,” he said.

In the case of natural gas, the impact will be somewhat more modest, with global demand for the fuel falling by four percent in 2020 followed by a rebound in 2021 where it makes up all the lost ground, Fraser said.

This is because gas is taking away business from coal in the power sector amid low prices, he said.

The agency expects an eight percent reduction in 2020 oil demand year-over-year, but a small reduction in nuclear demand, while renewables remain relatively unaffected.

In terms of global power demand, the IEA is seeing a five percent reduction in 2020, which would be the largest since the US Great Depression in the 1930s, Fraser said, adding the US is largely in line with that estimate.