COVID-19 SEEN TO AFFECT ENERGY DEMAND FOR NEXT 3 DECADES

The impact of the new coronavirus pandemic on the energy industry will be felt over at least the next three decades, with global demand expected to be 8-percent lower in 2050 compared to 2018 numbers.

According to Norway-based global renewable energy consultancy DNV GL, this is not necessarily good news for the worldwide move to restrain global climate change.

DNV GL said its energy forecast took off from the International Monetary Fund’s (IMF) scenario where global gross domestic product (GDP) would shrink by 6 percent in 2020.

“Our modelling shows the pandemic will reduce energy demand through to 2050 by 8 percent, resulting in energy demand in 2050 at almost exactly the level it was in 2018,” the company said in a preliminary report.

But while world GDP in 2050 is expected to be 9-percent smaller compared to prepandemic forecasts, it will still be double the current size. Latest IMF figures placed global GDP at $142 trillion as of 2018.

“Lasting changes linked to COVID-19 are mainly behavioral in nature and include the impact of the pandemic on the transport sector, especially aviation, but also on less office work and changed commuting habits, which will result in transport energy use never again reaching 2019 levels,” it added.

Also, while oil is seen to bow out as the world’s largest source of energy, it is not yet game over for hydrocarbons as oil’s twin—natural gas—is expected to take over.

“However, the reduced return on capital and the increased volatility in fossil fuel prices is making many investors look at these assets in the postCOVID world with a greater degree of caution,” DNV GL said “[T]hey may also now regard renewables assets more favorably, even though the pandemic is placing a temporary check on the expansion of renewable sources of energy.”

DNV GL forecasts further show that carbon dioxide emissions “most likely have already peaked” in 2019.

Still, the effects of the pandemic is seen doing little to advance the world’s progress toward climate change mitigation goals.

“[The] key to reaching the Paris goals remains policy— the political choices and policy delivered around the world that encourages the correct behavioral changes and enables the right technical solutions to scale,” the company said.