(Montel) The coronavirus pandemic could usher in a decade with the lowest rate of energy demand growth since the 1930s, the International Energy Agency (IEA) warned on Tuesday, noting a recovery may not be felt until 2023-25.
“Despite a record drop in global emissions this year, the world is far from going enough to put them into decisive decline,” Fatih Birol, executive director of the IEA, said in the agency’s World Energy Outlook report, published on Tuesday.
Regarding fuels, the IEA expected oil demand to fall 8% this year, coal use to drop by 7% and natural gas demand to decline 3%. However, global electricity demand looked set to be down by a relatively modest 2% for the year.
The IEA foresees energy demand recovering in early 2023, based on an assumption that the coronavirus pandemic is brought under control in 2021. But a prolonged pandemic would mean energy demand only returns in 2025.
“The pandemic has intensified the uncertainties facing the oil and gas industry,” the IEA said.
“The timing and extent of a rebound in investment from the one-third decline seen in 2020 is unclear, given the significant overhang of supply capacity in oil and gas markets, and uncertainties over the outlook for US shale and for global demand,” it added.
“Pressure is meanwhile increasing on many parts of the industry to clarify the implications of energy transitions for their operations and business models, and to explain the contributions that they can make to reducing emissions.”