This morning, the International Energy Agency launched its World Energy Outlook 2020 report and it seemed like a good opportunity to share some thoughts on the report.
The basic premise is to provide possible energy scenarios for the next decade, particularly as it relates to our recovery from the COVID pandemic and potential impacts on the global energy future.
The International Energy Agency (IEA) has come up with four possible scenarios. Briefly, they are as follows:
- The Stated Policies Scenario (STEPS): Covid-19 is gradually brought under control in 2021 and the global economy returns to pre-crisis levels the same year.
- The Delayed Recovery Scenario (DRS): A prolonged pandemic causes the global economy to return to pre-crisis size only in 2023. Energy demand growth is at its lowest since the 1930s.
- The Sustainable Development Scenario (SDS): A surge in clean energy policies and investment puts the energy system on track to achieve sustainable energy objectives.
- New Net Zero Emissions by 2050 case (NZE2050): All objectives are achieved in the SDS, putting global emissions on track for net zero by 2070.
It is nigh on impossible to predict how the next year will play out. While most pray for a rapid recovery supported by sustainable development, it would seem naive to assume that the recovery will follow a similar trajectory around the world.
I foresee that, regardless of the scenario that plays out, recovery in certain parts of the world is likely to be slower than in others and that in Africa in particular, the effects will be the most profound. As available funds are diverted toward heath care and dealing with the immediate economic challenges of a recovery, energy poverty will rise the longer economic recovery and growth is delayed. This rise in energy poverty will not be limited to Africa or developing economies either – we are likely to see it across a number of countries and socio-economic groups in Europe and the United States as well.
The report covers a wide range of scenarios and features analysis on the impact on the grid, the financial status of utilities post pandemic and the role that renewable energy and fossil fuels may play. I would encourage you to read it, or the fairly detailed synopsis available on the IEA site.
I would be interested too in hearing from you as to which of the scenarios proposed are the most likely to occur, or if we will see multiple scenarios playing out across the world.
Wishing you a week with a positive outlook!
Until next time