Tumbling Fossil Fuel Consumption
The coronavirus pandemic has sent fossil fuel consumption tumbling. As the world was placed on a virtual lockdown over coronavirus fears, a dramatic reduction in industrial activity, flying, and driving reduced the need for fossil fuels in countries all around the world. In fact, the reduction in economic activity, transportation systems, and other aspects of normal daily life initiated the largest drop in energy demand that has ever been experienced throughout history (Rathi, 2020). However, while people around the world began to consume less oil, coal, and gas, the renewable energy industry continued to make gains during the height of the coronavirus pandemic. Will the reduction in fossil fuel consumption and the increase in renewable energy generation set the stage for the next global energy transition?
The beginning of 2020 has been the worst year in modern history for the fossil fuel industry. Oil prices turned negative, natural gas supplies have been vastly exceeding demand, and coal has experienced the largest drop in demand sine World War II. According to a new report released by the International Energy Agency, the global demand for coal is expected to drop by eight percent in 2020 (Hodges and Martin, 2020). Moreover, the demand for oil will fall by nine million barrels a day, which is representative of a nine percent drop in global demand (Rathi, 2020). The natural gas market had already taken a sizeable hit prior to the start of the coronavirus pandemic. The warmer than average winter in the northern hemisphere sent levels of gas consumption falling well below what has typically been consumed over the winter. The warm winter, coupled with the coronavirus pandemic, is expected to create the first annual drop in natural gas consumption since 2009 (Rathi, 2020).
A Reduction in Carbon Emissions
As fossil fuel consumption has dropped precipitously, the world’s total carbon dioxide emissions have fallen to levels that haven’t been seen in over a decade. The International Energy Agency says that global carbon emissions will be cut by about eight percent in 2020 as a result of the decline in economic activity. While eight percent may not seem like too significant of a drop, this reduction in carbon emissions would be twice as much as all previously recorded declines in carbon emissions since World War II (Mufson, 2020). When compared to the decline in carbon emissions that was experienced during the global financial crisis of 2009, the coronavirus pandemic is expected to create a reduction in emissions that is roughly six times as much as was felt in 2009 (Mufson, 2020).
India’s Clean Air
What are the impacts that are being felt as a result of the decline in fossil fuel consumption? For many residents that live within typically smog-ridden cities in India, China, and other rapidly developing regions, the decline in fossil fuel consumption has brought about a unique phenomenon that is rarely experienced: blue skies and clean air. Prior to the coronavirus pandemic, India’s capital city of New Delhi held the title of having the world’s most polluted air. In November 2017, researchers reported that the air in New Delhi had reached a measurement of 999 micrograms of toxic particulate matter on the Air Quality Index, which is commonly used by government agencies to evaluate air pollution (Irfan, 2017). A reading of 999 is immensely hazardous since the Air Quality Index deems any reading above 150 to be “unhealthy.”
While New Delhi has long battled toxic air pollution, the nationwide coronavirus lockdown had led to an unprecedented drop in air pollution. Between 2016 and 2020, NASA has been closing monitoring air pollution in India during an annual six-day period from March 31 to April 5. Using a Moderate Resolution Imaging Spectroradiometer (MODIS), NASA was able to unequivocally prove that declining economic activity and fossil fuel consumption had contributed to a massive drop in air pollution. Overall, the MODIS evaluation conveyed that air pollution in northern India has fallen to its lowest level in 20 years (Gupta, 2020). After the Indian government enacted a nationwide lockdown to combat the spread of coronavirus, the executive order also inadvertently helped clean up India’s air. While the drop in deadly air pollution is a welcoming sign for India, environmental experts say that the clean air may be short-lived if the country fails to enact pollution controls when the economy returns to a state of normalcy.
The Decline of Coal
Government officials and environmentalists say that a main factor that has led to cleaner air in New Delhi has been the decline in energy generation from coal-fired power plants. Prior to the start of the coronavirus lockdown, about 78 percent of power generated in India came from coal, which helped to make India one of the world’s biggest user of this dirty fossil fuel (Varadhan, 2017). In addition to being heavily reliant on coal for electricity generation, India’s coal power plants are much less efficient than those that are located in more developed countries like the United States. Moreover, the Indian coal that is typically used in the inefficient power plants has a very high ash content, which makes this source of power generation even worse for air pollution. However, when economic activity came to a halt because of the coronavirus lockdown, India shut down many of its coal power plants, which prevented new ash and carbon emissions from being sent into the air.
The decline in coal power generation is not just being felt in India; it is being seen in countries all around the world. As less power has been needed from the economic decline, countries have been temporarily closing coal power plants. As the world’s biggest consumer of coal, China has seen the demand for coal already fall by five percent in 2020 (Hodges and Martin, 2020). Numerous other countries like Austria, Albania, Estonia, Belgium, Norway, Sweden, Latvia, and Lithuania have all completely shut down their coal power generation. The International Energy Agency says that Europe has seen coal demand fall by 20 percent, while it has fallen by 25 percent in the United States (Hodges and Martin, 2020). As the coal industry had already been declining over the past decade, some coal companies worry that this may signal the ultimate end of the industry as a whole.
Growth in Renewables
Amidst the historic plunge in demand for coal, oil, and natural gas, some energy experts believe that renewable energy producers may be the only winners in this unparalleled decline in global energy consumption. As fossil fuel power plants have been shut down during the pandemic, renewable energy projects continue to be brought online. On April 6, during the height of the coronavirus outbreak in Spain, the country connected the new 500-megawatt Núñez de Balboa solar power generation facility to the electric grid. With enough power generation capabilities to supply electricity to 250,000 people, Núñez de Balboa solar facility is now the largest array in Europe (Givetash, 2020). Despite the massive decline in fossil fuel consumption, the renewable energy market has continued to make gains during the coronavirus outbreak.
Fossil fuels have dominated the global energy market for decades. However, in recent years, renewable energy generation has vastly overtaken fossil fuels when it comes to newly added power generating facilities. Since 2015, 72 percent of newly added energy generation has come from renewable sources of energy rather than fossil fuels (Givetash, 2020). In addition to opening the largest solar array in Europe at Núñez de Balboa solar park, multinational energy provider Iberdrola has continued work on a wide variety of renewable energy projects around the world. Iberdrola’s director of renewable energy generation has said that moving forward with renewables during the pandemic has been a straightforward process that provided jobs and economic activity in a time when other industries are struggling.
A Turning Point
Fatih Birol, the International Energy Agency’s executive director, has described the coronavirus pandemic as a potential turning point for the world supply of energy. Birol says, “The energy industry that emerges from this crisis will be significantly different from the one that came before” (Rathi, 2020). The sole energy sector that is predicted to grow in 2020 will be the renewable energy sector. Low operating costs and easy access to electrical grids has created the perfect storm for the renewable energy industry. When compared to the workers, supply chains, and raw materials that are often needed to keep fossil fuel power plants operating, renewable energy generation sites usually don’t need supply chains and continuous inputs of raw materials to keep the energy flowing. Instead, all renewable energy needs is sunlight, wind, or flowing water over hydro-powered turbines. As fossil fuels have been taken offline, the share of renewables in the global electric grid has continued to grow.
Renewable energy generation has grown by three percent during the first quarter of 2020 and made up about 28 percent of the global electricity supply, which is up from 26 percent during the previous year (Stevens, 2020). On April 20, Germany set a record when solar power provided 40 percent of the country’s electricity needs (Pontecorvo, 2020). The United Kingdom has also experienced a record level of solar energy, which has helped the country shut down its entire system of coal-fired power plants. As renewable energy has grown and fossil fuel consumption has fallen, carbon emissions have also been dropping. As the cost of renewable energy generation projects continues to fall, the role that fossil fuels play in the global energy portfolio is also expected to fall. The cost of power generation from wind farms has fallen by nine percent since 2019, while the cost of power generation from solar electricity has also declined by four percent since 2019 (Pontecorvo, 2020).
Sustaining an Energy Shift
Even though many environmentalists and renewable energy advocates point to the drop in fossil fuel production during the coronavirus pandemic as a sign that the world is making progress at mitigating carbon emissions, the issue is much more complicated than that. While pollution is lower and renewable energy growth is experiencing its best year in recent memory, it is too soon to tell whether this switch in power choices will stick around after the coronavirus pandemic subsides. Every month that global economies have been placed on lockdown, the demand for energy has fallen by 1.5 percent (Rathi, 2020).
The International Energy Agency says that the drop in carbon emissions is not expected to be a permanent shift towards a greener energy sector. Instead, the agency believes that, once economies start to open back up, the growth in emissions will outweigh any temporary decline. Instead, the only way to sustain a permanent shift in energy consumption would be to provide a wave of new investments in clean energy infrastructure. As the global economy continues to address the economic fallout that has been experienced since the beginning of 2020, it’s unclear whether renewable energy generation will continue to remain as a top priority for many of the world’s countries.
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