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World Energy Outlook, 2020

World Energy Outlook, 2020


  • The World Energy Outlook, the IEA’s flagship publication, provides a comprehensive view of how the global energy system could develop in the coming decades.
  • This year’s exceptional circumstances require an exceptional approach.
  • The usual long-term modelling horizons are kept but the focus for the World Energy Outlook 2020 is firmly on the next 10 years, exploring in detail the impacts of the Covid-19 pandemic on the energy sector, and the near-term actions that could accelerate clean energy transitions.
  • The analysis targets the key uncertainties facing the energy sector in relation to the duration of the pandemic and its implications, while mapping out the choices that would pave the way towards a sustainable recovery.
  • The strategic insights from the WEO-2020 are based on detailed modelling of different potential pathways out of the crisis, covering all regions, fuels and technologies and using the latest data on energy markets, policies and costs.

Key findings | World Energy Outlook, 2020

  • Impact of COVID 19: Immediate effects of the pandemic on the energy system shows following expected declines in 2020: o 5% in global energy demand,
    • 7% in energy-related CO2 emissions and
    • 18% in energy investment.
    • 20% in oil consumption
  • Demand for renewable energy: Renewables are less affected than other fuels by the pandemic and its aftermath. Renewables will meet 90% of the strong growth in global electricity demand over the next two decades, led by continued high levels of solar PV deployment. By 2040, coal’s share in global energy demand dips below 20% for the first time in modern energy history.
  • Structural fall in global coal demand: Coal phase-out policies, the rise of renewables and competition from natural gas lead to the retirement of 275 gigawatts (GW) of coal-fired capacity worldwide by 2025 (13% of the 2019 total)
  • Oil Demand: Rising incomes in emerging market and developing economies create strong underlying demand for mobility, offsetting reductions in oil use elsewhere.
  • Electricity grids: There is a disparity in many countries between the spending required for smart, digital and flexible electricity networks and the revenues available to grid operators.
  • Interconnected and complex nature of the electricity grid delivers several benefits including:
    • Reliability: Since the grid is an enormous network, electricity can be deployed to the right places across large regions of the country.
    • Flexibility: The electricity grid allows a power system to use a diversity of resources, even if they are located far away from where the power is needed.
    • Economic competition: Because the grid allows multiple generators and power plants to provide electricity to consumers, different generators compete with each other to provide electricity at the cheapest price.

Indian scenario

  • The declines in electricity and transport demand in India have been among the deepest globally, but the contractions over the full year are likely to be smaller than the global average.
  • The impact of the crisis on energy demand is heavily dependent on the duration and stringency of measures to curb the spread of the virus.
  • At the same time, lockdown measures are driving a major shift towards low-carbon sources of electricity including nuclear, hydropower, wind and solar PV.

Challenges | World Energy Outlook, 2020

  • Financial health of Power sector: India faces the challenge of ensuring the financial health of its power sector which is dealing with surplus capacity, lower utilisation of coal and natural gas plants, and increasing shares of variable renewable energy.
  • Energy taxation and subsidies: Subsidies on electricity creates a large financial burden on the GoI budget, notably at times of rising prices for energy commodity imports.
  • Increase in oil demand: India’s transport energy demand is growing rapidly. Oil products supplied 95% of total energy in the sector, mostly diesel and gasoline.
  • Coal continues to be the largest domestic source of energy supply and electricity generation.
  • Number of policy makers: Energy policy in India is conducted by a number of different ministries (ministry of power, ministry of renewable energy, ministry of oil and natural gas) that have responsibility for their sector.

Way Forward | World Energy Outlook, 2020

  • India’s Energy Plan aims to ensure energy justice (more energy for Indians) while fully following India’s global commitments (smaller carbon foot-print) for sustainable growth.
  • Government should adopt a national energy plan to set a long-term framework for all stakeholders across the energy system,
  • which also identifies future energy infrastructure investment needs and provides an integrated approach.
  • Electricity and natural gas can be to be brought under the GST to provide a level playing field between coal and gas.
  • Electricity and natural gas remain outside of the GST.
  • Government should phase out indirect subsidies to ensure that retail energy prices reflect the full costs of energy.
  • Develop a holistic strategy on renewable energy, encompassing both supply and use, for electricity, heating and cooling as well as transport to fully harness India’s large untapped potential.
  • Creation of transparent and flexible markets for both oil and gas.


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