The Covid-19 pandemic is having a major impact on energy systems around the world, curbing investments and threatening to slow the expansion of key clean energy technologies. Looking at all the data so far on how the Covid-19 crisis is impacting clean energy transitions, 10 key themes emerge – and this article examines each of them.
CO2 emissions: Short-term shock does not guarantee sustained decline
Furthermore, after past economic downturns, emissions recovered rapidly as economies regained their footing. While the current crisis may have accelerated some structural changes – such as the decline of coal in Europe – the temporary drop in energy use resulting from mass restrictions on movement is far from sufficient. Smart and ambitious government policies will be needed to bring about the kind of sustained structural adjustments needed across a full range of sectors to achieve long-term climate goals.
Renewables have been resilient so far, but government support remains key
Despite this resilience, renewables’ growth is expected to slow down in 2020. The world is set to add only 167 gigawatts (GW) of renewable power capacity this year – 13% less than in 2019. This decline reflects delays in construction due to supply chain disruptions, lockdown measures and social distancing guidelines, as well as emerging financing challenges. The majority of delayed utility-scale projects are expected to come online in 2021, but installations of rooftop solar PV for businesses and households may continue to be depressed in the medium term without strong government support.
The share of renewables in global electricity supply reached nearly 28% in the first quarter of 2020, up from 26% during the same period in 2019.
Beyond electricity, renewables have been less resilient. Transport biofuel production is expected to contract by 13% in 2020 – its first drop in two decades. Renewable heat consumption is also likely to decline in 2020, mainly due to lower activity in the industrial sector. Adding to these difficulties, low oil and gas prices are making biofuels and renewable heat technologies less cost-competitive.
Governments have an unprecedented opportunity to accelerate clean energy transitions by making investment in renewables a key part of stimulus packages to reinvigorate their economies. Investing in renewables, whose costs continue to fall rapidly, can stimulate job creation and economic development while reducing emissions and fostering further innovation.