A report has found that Covid-19 prompted major shifts in energy demand, but only buys us a little time before we exceed emissions targets.
The behavioural and economic ramifications of Covid-19 will permanently reduce energy demand, according to a new Energy Transition Outlook report from risk management firm DNV GL. Its authors claimed that energy demand will be between 6pc and 8pc lower each year until the middle of the century compared with pre-pandemic estimates.
This is because two of the greatest contributors to energy demand and oil demand in 2019 – long-distance travel and the need to work from an office – have reduced substantially with many continuing to work from home.
Estimates suggest CO2 emissions will fall 8pc this year. However, if we are to keep within the 1.5 degrees Celsius global temperature increase limit set out in the Paris Agreement, the planet will still exceed its carbon budget in 2028.
“Covid-19 has changed the global energy outlook, yet the global climate crisis remains as urgent as before the pandemic,” said Remi Eriksen, group president and CEO of DNV GL.
“Early optimism about decreased air pollution has been replaced by the cold reality that it is not because of a more decarbonised energy mix, but because of short-term changes unique to the pandemic. We can transition faster with the technology at hand, but now more than ever before, we require national and sectorial policy incentives to bring us to the ambitions of Paris.”
‘We can’t empty the airliners twice’
In terms of renewable electricity generation, DNV GL said that significant shifts are underway and will be affordable in years to come. Within a generation, it said, renewables and fossil fuels will have roughly an equal share of the energy mix compared to an approximately 20-80 split today.
The share of electricity in the final energy mix is expected to double by mid-century, with solar and wind contributing 31pc each. By 2050, the report estimated that floating offshore wind will have 250GW of capacity installed.
Humanity will be spending approximately 1.6pc of global GDP on energy by 2050, the report added, down from 3pc in 2018. With DNV GL predicting that half of new car sales will be electric vehicles by 2032, this could lead to an estimated decrease in oil demand of 56pc by 2050 compared with 2018.
“We can’t empty the airliners twice, so we need all hands-on deck to find practical solutions to the climate crisis now,” Eriksen said.
“The rapid rise of solar [photovoltaic], wind and battery technologies in recent years gives me hope that humanity has solutions at hand, however the so-called hard-to-abate sectors need strong policy incentive to move the needle on decarbonisation.”