This article is taken from World Energy (WE) number 47 – The world to come
Coronavirus represents an unprecedented challenge to humanity. It affects our way of life, our governance and our economies. Together with climate change, it creates a perfect storm. Recent power outages and their impacts on populations are a warning to urgently address climate issues. The Inter-governmental Panel on Climate Change (IPCC) believes that the world has only 10 years to reduce greenhouse gas (GHG) emissions by 50 percent. Unfortunately, we can see that international cooperation is failing to respond to these two challenges. Differences regarding the World Health Organization (WHO) and controversy about Russia’s announcement that it has a coronavirus vaccine are good examples. The pandemic and its impact on economies has overshadowed the need for climate actions. In times of uncertainty, leadership is crucial. The European Union (EU) could provide this leadership by building a successful pathway towards its goal of having a carbon neutral economy by 2050. As energy drives the economy and is also the largest source of GHG emissions, the energy transition is a key element in the Green Deal. The energy sector has been heavily impacted by the pandemic. The current fall in energy demand is the largest in 70 years, and the impact of the coronavirus is seven times greater than that of the financial crisis in 20082009. The International Energy Agency (IEA) estimates that in 2020 energy demand will be at least six percent lower than in 2019. Energy investment is down by $400 billion, a 20 percent reduction. The EU electricity demand decreased by three percent in the first quarter of the year and the carbon footprint of electricity generation decreased by 20 percent, with renewable energy sources (RES) reaching a 40 percent share of the power mix. Increased flows of intermittent renewable energy in this low demand environment need to be managed. Electricity day-ahead prices and gas prices have plunged.