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World Energy Outlook 2020
27 November 2020

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Covid-19 and the energy outlook• In an extraordinary year, 2 key questions:- How might the pandemic (and its aftermath) reshape the energy sector?
- Does this disruption help, or hinder, the prospects for rapid clean energy transitions?
• Focus on pathways out of today’s crisis over the next 10 years, amid 2 key uncertainties- Duration and severity of the pandemic and its economic impacts- Response from energy policy makers and the sustainability of the recovery• Scenario-based approach more important than ever, to examine:- The direction we are heading, depending on the outlook for public health & the economy- What would be required to reach net-zero emissions

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A shock to the energy system

4%
3%
2%
1%

Energy demand
Index (2019=100)

Average annual GDP growth(2019-30)
120

WEO-2019
Stated Policies
Scenario
Delayed Recovery
Scenario

110

10090
DelayedRecovery
ScenarioStatedWEO-2019Policies Scenario

2019

2023

2025

2030

Bringing the pandemic under control in 2021 would allow energy demand to return to pre-crisis levels byearly 2023. A longer pandemic would usher in the slowest decade of energy demand growth for a century
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Impacts vary widely by fuel & technology
Change in primary energy demand, 2019-2020
Mtoe

900
600
300
0-300-600

Oil

CoalGasNuclearModern renewables

After a 5% drop in energy demand in 2020, renewables lead the rebound while coal never gets back to
pre-crisis levels
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Impacts vary widely by fuel & technology
2030
2029
2028
2027
2026
2025
2024
2023
2022
2021
Change in primary energy demand, 2019-2020
Mtoe

900

Stated Policies Scenario (STEPS)

600
300
0-300
-600

Oil

CoalGasNuclearModern renewables

After a 5% drop in energy demand in 2020, renewables lead the rebound while coal never gets back to
pre-crisis levels
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Impacts vary widely by fuel & technology
2030
2029
2028
2027
2026
2025
2024
2023
2022
2021
Change in primary energy demand, 2019-2020
Mtoe

900

DelayedRecovery
Scenario(DRS)
Stated Policies
Scenario(STEPS)

600
300
0-300-600

12345

After a 5% drop in energy demand in 2020, renewables lead the rebound while coal never gets back topre-crisis levels; a delayed recovery puts energy into slow motion, prolonging today’s overhang of supply
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Without a larger shift in policies, no rapid decline in oil
Global oil demand by scenario
mb/d110
WEO-2019
STEPS

100DRS
Reaching 2019 levels

90802015

Sustainable Development
Scenario
20202025

2030

In the STEPS & the DRS, oil demand reaches a plateau in the 2030s as transport fuels are no longer a reliable
engine for growth; a stronger push for efficiency, electrification and recycling will be needed for oil use to fall
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Conditions for coal supply look increasingly challenging
Global coal demand
Mtoe 4 000

Change by region

Pre-crisis

3 500

United States
European Union
China

STEPSDRS

3 000

India

- 500

Southeast Asia
Other-1 000

2 500
SDS
2 000
2010500

2015

2020

2025

2030

-1 500-2 0002010-19

STEPS

DRS

SDSLower demand exerts sustained pressure on the coal industry. International coal trade is further squeezed byefforts to boost domestic output in China and India. The SDS intensifies the pressure on all suppliers.
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Diversification: the critical watchword for oil and gas producers
Today’s value of oil and gas production to 2040
Trillion dollars

2520-24%Gas
Gas1510Oil

50-34%

WEO-2019

Gas
Oil

Stated Policies
Scenario

Oil
Sustainable Development
Scenario

A lower price and demand outlook, due in the near term to Covid-19, adds to the strains on countries that relyon oil & gas revenues. The pressure for changes in strategies & business models is even stronger in the SDS
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Solar PV is becoming the ‘new king’ of electricity

TWh

Change in global electricity generation
8 000

2000-20192019-2040

4 000

STEPS
SDS0CoalGas

Other lowcarbon

Wind

Solar PVCoalGas

Other lowcarbon

Wind

Solar PV-4 000-8 000

Solar PV is now the cheapest source of electricity in most countries in part due to low cost financing andis set to triple before 2030 under current and proposed policies
policies, with the potential to grow much faster
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Grids are the bedrock of a clean & secure electricity future
Change in grid operator revenue
First half of 2020

Million kilometres

Grids expansion
20
16-1%

12-2%

8-3%

4-4%

2009-2019-5%

2020-2030
STEPSUnitedStates

China

Germany

Electricity networks
transformations
are therequire
key to electricity
a step up insecurity,
grids expansion
unlockingto
flexibility
ensure thatfromelectricity
power plants,
remainsstoragereliable,affordable and secure
secure, however depressed revenues are creating risks for timely investment
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The world is still far from putting emissions into decisive decline

Gt CO240

STEPS

30

Full implementation of 2050 net-zero pledges(e.g. EU, UK, New Zealand and others)
China 2060 net-zero statement

2010Net-zero in 2050
2010

2020

2030

2040

2050

2060

SDS

2070

Global emissions are set to bounce back more slowly than after the financial crisis of 2008-2009,
but the world is still a long way from a sustainable recovery
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Net-zero by 2050 demands unprecedented efforts over the next decade
Build wind onshore and offshore Eliminate flaring Improve product efficiency

Hydrogen Equip with CCUS Deploy solar
Widespread digitalisation Fuel-cell trucks Low-carbon gases
0.45 Mt
2020
Low-emissions shipping Extend and digitalise grids
Innovation
2030
batteries & electrolysers Modernise hydropower Mt

400.45Government
policies
FinanceElectric cars

Advanced biofuel production Expand nuclear power &develop SMRs

Install batteries and solar at home50
2.5Retrofit homes

Walk or cycle short trips
Buy energy efficient appliances
Turnmillion
down air conditioning Fly less often
2020 2.5Work
fromhome Upgrade home heating to heat pumps
million cars sold2030
Drive more slowly
Increase recycling

Clean electricity investment

1.6380Investin innovation
Align portfolios
with low-emissions activities
380 billion$2020
Develop new financial tools to unlock private capitalbillion $trillion
2030
Investment guidelines Improve bankability of efficiency investments

Manage risks for new technologies Increase investment in renewables

Net zero energy emissions in 2050 would require a set of dramatic additional actions over the next 10 years.
Energy companies, citizens and investors all need to be on board – with unprecedented contributions to makeIEA 2020. All rights reserved.

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Behaviour changes could have large impacts
Impact of behaviour changes on CO2 emissions in the NZE2050
2021

2025

2030

- 500-1 000-1 500
Mt CO2-2 000

Residential
Reduce domestic heating by 3°C
Reduce domestic cooling by 3°C
Line-drying
Reduce laundry temperature
Road transport
Reduce driving speed by 7 km/h
Eco-driving
Ride-sharing
Cycle/walk short trips
Reduce mobile air conditioning
Working from home
Aviation
Cut ¾ long-haul leisure flights
Reduce regional flights
Reduce business flights

Behaviour changes can quickly reduce emissions from existing end-use assets; around 60% of measures could
be supported or influenced by government policies
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Existing infrastructure alone could lead to a temperature rise of 1.65 °C

30

Existing energy infrastructure
Other
Other

20

Industry
Industry

10

1900

FuturePast

Gt CO2 40

Global averagetemperature increase

PowerPower
1920

1940

1960

1980

2000

2020

2040

2060

2080

2100

Using existing energy infrastructure as in the past would “lock in” emissions for decades to come;the associated 1.65 °C global average temperature increase would put all climate goals out of reach
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15+1.65 °C

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Conclusions• The pandemic will leave lasting scars, but it is still open whether it represents a setback for a more secureand sustainable energy system, or a catalyst that accelerates the pace of change• Renewables have taken off, with solar leading the way. But a slowdown in improving access to electricity
and a risk of under-investment in grids are warning signs for the future• The crisis has squeezed oil and gas revenues and investment, forcing producers to reassess their strategiesto align with technology and policy shifts• Getting to net zero means ramping up clean technology deployment while continuing to reduce costs,
especially through innovation for hydrogen and other low-carbon fuels, battery storage & CCUS
• There are no short cuts; only profound changes, guided by good policies, can deliver a better energy future.
This is a choice – for citizens, investors, companies, but most of all for governments

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