The impact of the COVID-19 crisis on clean energy progress

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

The global pandemic has imposed unprecedented constraints on social and economic activity – particularly on mobility – with severe impacts on energy use. Global energy demand is expected to contract by 6% in 2020, the largest drop in more than 70 years. Global CO2 emissions are expected to decline 8% in 2020, falling to their lowest level since 2010. This drop in emissions is no cause for celebration, since it is the result of a global health crisis, surging unemployment and tremendous economic hardship. Even the flattening of CO2 emissions during the robust economic growth of 2019 was far from the annual 6% reduction required in the IEA’s Sustainable Development Scenario (SDS), which is fully aligned with climate goals of the Paris Agreement.

 

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

Renewable power sources have so far demonstrated resilience in the face of the Covid-19 crisis. 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. 

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.

 

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How to Use Socially Innovative Policy-Making for an Inclusive Energy Transition

Social innovation should accompany environmental policymaking. Policies will have little effect without the acceptance and understanding of the people directly affected by the changes. Much of the climate change discourse centers on wide-scale economic, social and cultural change – this rhetoric gives people little agency, leaving many feeling alienated.

Policies will have little effect without the acceptance and understanding of the people directly affected by the changes.

Social innovation in the context of the energy transition is a process of change in social interaction and the sharing of knowledge leading to – or based on – new environmentally sustainable ways of producing, managing, and consuming energy that address social challenges. There are many pioneering European cities applying socially innovative approached in local energy transitions with replicable approaches. Based on studies in such cities – the following nine practical recommendations are a red thread for any policy maker to follow when planning and implementing novel energy policies.

Recommendation 1: Build on existing engagement. Pro-environmental dispositions have been found to be important drivers of social innovations in the energy sector. This is the case irrespective of the actor involved, whether a citizen or a NGO. Connecting with individuals or groups with existing environmental engagement or taking a step further and develop environmental engagement in stakeholders is good way to build support.

Recommendation 2:  Welcome resistance. People often demonstrate resistance when faced with ambiguity, such as the financial ramifications of a new energy policy. It is important to acknowledge these concerns as valid and to be transparent about associated risks and costs. Identifying hesitant groups and involving them in trial periods and planning, can help alleviate concerns.

Recommendation 3: Be trustworthy. Trust in the abilities and good intentions of stakeholders and decision-makers is a key factor for the acceptability of new policies. A recent study[1] in France indicated very few people deny climate change (irrespective of their social status), but they do not trust institutions to be able to fix it. Participatory processes are a good way to strengthen trust, especially with disadvantaged groups suffering from energy poverty. Giving people opportunities to express concerns and fostering wider dialogue in order to avoid polarisation of opposing groups is important.

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