Global Gas Demand to Fall 5%: IEA
Global gas demand in 2020 is expected to decline 5% yr/yr, the International Energy Agency said in its latest report. Despite the significant impact of Covid-19 on oil and coal demand, the impact of the pandemic on global gas demand was more moderate, at around 2% in Q1 2020, but it could fall much further across the full year than in the first quarter, with reduced demand in power and industry applications, IEA said April 30.
This drop would be the first in annual consumption since the 2% drop in 2009, and the largest recorded year-on-year drop since natural gas demand developed at scale during the second half of the 20th century, the report says.
Natural gas consumption is expected to fall in every sector and region in 2020, but most of the declines are in power generation, which expected to consume 7% less than 2019. Power plants accounts for almost 60% of the expected decrease in global demand.
Oil demand is expected to decline 9.3mn b/d yr/yr, mostly owing to lockdowns and less demand in transportation.
Demand in April is estimated to be 29mn b/d lower than a year ago, falling to a level last seen in 1995. For Q2 as a whole, demand is expected to be 23.1mn b/d below 2019.
Coal consumption is also expected to fall by about 8% in 2020, the largest drop since World War II, with almost every sector of every region in the world using less, especially in the power sector, where two-thirds of coal is consumed.
Less demand for fossil fuels would lead to falling emissions. IEA forecast global CO2 emissions to decline by 8%, or almost 2.6 gigatons, equivalent to 2010's emissions. “Such a year-on-year reduction would be the largest ever, six times larger than the previous record reduction of 0.4 Gt in 2009 – caused by the global financial crisis – and twice as large as the combined total of all previous reductions since the end of World War II,” it said.
As after previous crises, however, the rebound in emissions may be larger than the decline, unless the wave of investment to restart the economy is dedicated to cleaner and more resilient energy infrastructure. IEA said in Q1 the global use of renewable energy in all sectors rose about 1.5% relative to Q1 2019 and is expected to average 1% growth over the year as a whole.
Renewable electricity generation also increased by almost 3% yr/yr in first quarter and is expected to grow 5% for the year as a whole. The share of renewables in global electricity generation jumped to nearly 28% in Q1, from 26% in Q1 2019.