Despite coronavirus pandemic-related impacts, which hit the global energy industry hard, renewable energy continued to grow, but renewable energy alone will be insufficient to replace coal globally, experts said July 12.
Spencer Dale, BP’s chief economist, said this is the 70th anniversary of the BP Statistical Review of World Energy and there have “been some pretty amazing events in global energy over that time, including the Suez Canal crisis in the 1950s, the two oil shocks in the 1970s, more recently the Fukushima tragedy and all these events had a huge bearing on global energy systems, but all pale in significance to the events of last year.”
Global energy demand fell by about 4.5% in 2020 as pandemic-related lockdowns spilt over into global energy, which was the largest decline since 1944, Dale said during a remotely held panel discussion hosted by Columbia University’s Center on Global Energy Policy, adding that global carbon dioxide emissions fell by around 6%, which was the largest decline since World War II.
The biggest driver in the 4.5% decline in global energy demand was oil consumption, which declined by over 9 million b/d, accounting for about three-quarters of the fall in total energy demand, he said.
Natural gas proved more resilient, falling by around 2% in 2020, and the smallest decline was in electricity consumption, which declined by around 1% last year, according to the review.
US energy demand
The fall in US energy demand was larger than the global total, with US demand declining by around 7.7% despite US gross domestic product falling by roughly the same amount as the global total, Dale said.
Some of that reflects the relative oil intensity of the US economy, Dale said. And the nearly 20% drop in US coal consumption was also “eye-catching,” and largely a story of coal losing out to natural gas and renewables in the power sector, he said.
US power demand fell by around three times more than the global average, though Dale said he did not really have an explanation for that diversion from the global trends.
Globally, renewable energy led by wind and solar power installed capacity grew by a “colossal” 238 GW, which is 50% more than any time in history, Dale said, with a large majority of the increase coming from China.
The growth in renewable energy installed capacity fed through to increased renewable energy generation in 2020, which largely came at the expense of coal-fired power, according to BP.
Energy transition dynamics
“This trend in strong renewable energy output growth crowding out coal is exactly what the world needs to see as it transitions to net-zero greenhouse gas emissions,” Dale said.
However, not all the panellists were as optimistic regarding the transition to cleaner energy.
Laura Cozzi, the chief energy modeller at the International Energy Agency, said that the global energy demand contraction in 2020 happened mostly due to pandemic-related lockdowns, but by December, energy demand was largely back to pre-crisis levels along with emissions.
“Emissions are expected to rebound very strongly and essentially” erase the savings made in 2020, Cozzi said.
She also said the energy transition is happening at different speeds with the developed economies transitioning much more rapidly than emerging economies.
“The 6.2% fall in global emissions the report lays out … seems like a pretty paltry number given the dramatic decrease in global economic activity at the time,” Meghan O’Sullivan, professor of international affairs and director of the geopolitics of energy project at Harvard University’s Kennedy School, said.
Coal being replaced by renewables in the US is positive for reducing emissions, “but the global picture of course is a lot less celebratory and is in fact very sobering,” O’Sullivan said. “Even with renewables growing as greatly as they have even within China, renewables are not growing enough to meet the increased demand for energy and certainly not enough to meet growing demand and displace coal,” she said.
The fact that global coal-fired power generation in 2020 was about the same amount at an absolute level as in 2015 “really suggests that if renewables grow as robustly as we saw in 2020, renewables are not going to be sufficient to really complete the energy transition,” O’Sullivan said.
The panelists agreed that new technologies like carbon capture, along with international collaboration on reducing coal-fired power generation and emissions will be needed to meet longer-term climate goals.
