Global Energy Demand Predictions Change in the Midst of COVID-19, But it’s Not All Bad
As the coronavirus, now a global pandemic, triggers a worldwide economic crisis, the implications will be felt in nearly every sector – including clean energy. But it isn’t all bad news. Solar is predicted to take the biggest hit, while wind energy is still expected to break records and electric vehicles sales should stay flat.
Bloomberg New Energy Finance (BNEF), one of the most respected research groups covering the energy landscape, offered its first assessment of the outbreak’s impact in mid-March.
Global Solar Demand Predictions
The research group cut its global solar demand forecast from 121 to 152 gigawatts (GW) down to 108 to 143 GW, with the biggest impact on installations taking place in China. The group noted that a lengthy shortage in PV modules isn’t likely, as Chinese factories will likely restart in Q2, and able to send supplies overseas. Still, if this decline happens, it will be the first time since the 1980s that the world experienced a decline in PV installations.
Wind Outlook Remains Positive
While BNEF notes there is “considerable downside risk” to its global wind energy forecast of 75.4 GW for 2020, the group doesn’t give a new capacity prediction. Analysts reveal that the size of the decline will largely depend on how fast Chinese wind power suppliers can ramp back up to full production as they emerge from isolation. Construction schedules in the U.S. are already tight due to the production tax credit (PTC) dropping from 30% this year to 10% in 2021. BNEF researchers do, however, still expect 2020 to be a record year for new wind capacity installed worldwide. Outside of China, the analysts say they see “minimal” impact on the offshore wind sector overall.
Electric Vehicle Sales to Remain Flat
Electric vehicle (EV) sales across the globe are also expected to weather the COVID-19 storm better than the sales of internal combustion vehicles, says BNEF. But EVs aren’t immune to a widespread decline in car sales in general that stem from the coronavirus. In China – the world’s largest market – researchers expect sales to be flat, but say that these numbers could take a dive if the COVID-19 recovery drags on. The supply chain interruptions will likely impact the battery demand, by an estimated 4 percent less than BNEF’s original growth forecast.
In the U.S., BNEF analysts are expecting flat EV sales this year, but it’s not completely due to the coronavirus pandemic. Other obstacles include uncertainty over our fuel economy, expiring EV tax credits for automakers, and declining oil prices.
What About Emissions?
The silver lining in this economic crisis, declining emissions are nothing to celebrate because they won’t be sustainable without the right policies and measures in place, says the International Energy Agency (IEA). Clean energy scientists and other experts are advocating for stimulus packages that include green infrastructure would help tackle two crises at once.