The economic and behavioural impacts of COVID-19 will significantly reduce global long-term energy demand, according to DNV GL.
The pandemic also accelerated the decline in carbon emissions.
DNV GL predicts that energy demand will be 8% lower in 2050 compared to the pre-pandemic forecast.
However, energy efficiency is expected to remain the key driver to reducing the world’s energy needs, although lower economic output following the COVID-19 pandemic is putting a further brake on demand.
Lasting behavioural changes to travel, commuting and working habits will also decrease energy usage and lessen demand for fossil fuels from the transport sector, as well as from iron and steel production.
Energy demand from the transport sector will never reach pre-pandemic levels.
Reduced demand for office space will negatively impact on iron and steel production resulting in massive decrease in energy demand.
Although energy demand is expected to be lower through 2050, DNV GL has said that the energy transition is still nowhere near fast enough to deliver on the Paris ambition of keeping global warming well below 2°C above pre-industrial levels.
To reach the 1.5-degree target, we would need to repeat the decline in emissions we’re experiencing in 2020 every year from now on.
To put this in perspective, the COVID-19 impact on energy demand only buys humanity another year of ‘allowable’ emissions before the 1.5°C target is exhausted (in 2029) and a couple of years before the 2°C warming carbon budget is exhausted (in the year 2050).
Remi Eriksen, the CEO of DNV GL, said: ”We are still at a critical junction. We basically have the technologies to deliver on the Paris ambition, but we need smarter policies to scale these technologies much faster. COVID-19 has caused enormous human suffering, but has at the same time shown us that measures can be implemented fast at scale.
“This is an opportunity that cannot go to waste. Governments and international regulatory institutions must take this opportunity to make a lasting impact on decarbonisation.
“The depth of the climate crisis is immense, but we have all the tools to prevent unsustainable global warming. Companies and governments must act now. Now more than ever we need technology and the scaling of technology to accelerate the uptake of renewables, energy efficiency measures as well as the deployment of industrial scale carbon capture and storage, and the use of alternative fuels.”
The full Energy Transition Outlook will be published on September 9 2020.