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, states IEA.
Before the crisis, progress on clean energy technologies had been promising, but uneven. The IEA's annual Tracking Clean Energy Progress report shows that only six out of 46 technologies and sectors were 'on track' to meet long-term sustainability goals in 2019. Those six included electric vehicles, rail transport, and lighting. Another 24 showed some progress, but not enough to meet long-term goals, while the remaining 16 were woefully 'off track.'
The IEA has been at the forefront of calls for governments to put clean energy at the heart of their economic recovery plans following the Covid-19 crisis. These once-in-a-generation stimulus packages are a unique opportunity to drive economic development by accelerating transitions towards more secure and sustainable energy systems.
The IEA will be releasing a sustainable recovery plan providing suggestions for how governments can achieve three goals simultaneously: boost economic growth, create new jobs, and build more resilient and cleaner energy systems. This World Energy Outlook Special Report on Sustainable Recovery, undertaken in collaboration with the International Monetary Fund, will focus on actions and policies that can be taken over the next three years. It will be published on 18 June.
IEA's findings will provide one of the key elements informing discussions at the upcoming IEA Clean Energy Transitions Summit, which we are organising on 9 July to help build momentum towards these goals on a global level. The event will bring together a grand coalition of government ministers, top energy Chief Executive Officers, major investors and other prominent leaders from the public and private sectors from around the world. It is the most important global forum on energy and climate issues in 2020 and is one of the key multilateral events on the road to next year's COP26.
The summit follows numerous IEA activities and high level events that have explored different aspects of Covid-19's impacts across the energy sector. This includes ministerial roundtables on 'the role of clean energy in economic recovery' (24 April), 'mobilising investment in sustainable and resilient electricity systems' (29 May), 'Covid-19's impacts on Africa's energy sector' (30 June) as well as the upcoming 'Global Conference on Energy Efficiency' (23 June).
The combination of the Covid-19 crisis and an exceptionally mild winter in the northern hemisphere have put global demand for natural gas on course for its largest annual decline in history. Although a rebound is expected in 2021, the latest IEA forecast for natural gas markets, Gas 2020, does not assume a rapid return to the pre-crisis trajectory.
The IEA states that nuclear power is the largest low-carbon source of electricity in Europe and North America and plays a major role in ensuring secure supplies of energy in many economies. But even in countries where there is general support for nuclear power, there is a growing risk that its role in energy systems will be undermined and the Covid-19 crisis threatens to exacerbate the situation. With aging capacity and financial strains, the contribution of nuclear power might begin to fade, increasing energy security risks and making clean energy transitions even more difficult.
Read more about the importance of nuclear power and its uncertain future in the latest commentary from IEA Chief Economist Laszlo Varro and Peter Fraser, Head of Gas, Coal and Power.
Periods of low fuel prices typically represent a golden opportunity to pursue pricing reforms. But the overriding economic priority for policy makers so far in 2020 has been to limit the damage from the crisis. As such, there are few signs so far that low fuel prices are prompting an accelerated effort to phase out subsidies, although pre-existing reform efforts have continued, IEA states.
Energy subsidy reform remains an important but difficult political challenge. However, according to the IEA, the prospects for building better after the crisis, in many parts of the world, are inextricably linked with getting price signals right, especially if subsidy reform is combined with a broader suite of policy measures aiming at more robust, secure and sustainable energy sectors.
Learn more about fossil fuel subsidies, read IEA's recent commentary, or explore the data behind the analysis in IEA's Energy Prices database.
Africa is projected to experience increasing threats from a changing climate in the coming decades, which are likely to pose a challenge to hydropower generation. Resilient hydropower, which can minimise the adverse effects of climate change, can play a key role in allowing Africa to meet long-term sustainability goals, implement clean energy transitions, and adapt to climate change.
IEA's recent report, Climate Impacts on African Hydropower, aims to enhance the climate resilience of African hydropower by identifying measures to enhance climate resilience and providing policy recommendations.
The 5th Annual Global Conference on Energy Efficiency will be held on 23 June. There will be more than 2000 people from over 100 countries in a comprehensive discussion on key issues for energy efficiency, in particular its role in economic responses to the current Covid-19 crisis.
The day will be start with IEA Executive Director Dr Fatih Birol, followed by more than 40 high-level speakers, including President Salome Zourabichvili of Georgia, Ministers from Austria, Canada, Colombia, Ireland, Italy, Luxembourg, Morocco, New Zealand, Panama, Spain, and United Kingdom, and Commissioners from the African Union and the European Commission. Representatives from industry include CEOs from Toshiba, Saint Gobain, Danfoss, the Australian Energy Market Operator, the World Green Building Council and many more.
A central element of the Global Conference will be the recommendations of the Global Commission for Urgent Action on Energy Efficiency, which will be launched as part of the event, highlighting how progress on energy efficiency can be accelerated through new and stronger policy actions by governments.