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Global energy demand fell beyond predictions in 2020: bp Statistical Review

Global energy demand fell the most since World War-II during 2020 as the Covid-19 pandemic stalled global economic activity. According to the bp Statistical Review of World Energy 2021, world energy demand is estimated to have fallen by 4.5 per cent in 2020.

This is steeper than the earlier projections for the year. “Even after controlling for the collapse in economic activity, the decline in energy demand was close to twice the size of the ‘predicted’ fall: 4.5 per cent compared with a predicted fall of around 2.5 per cent.”

The crash is largely on account of lower oil demand that is estimated to have fallen by an unprecedented 9.3 per cent (9.1 million barrels a day) in 2020. “This is far bigger than anything seen in history and far bigger than the falls in the other demand components. Indeed, the fall in oil demand accounts for around three-quarters of the total decline in energy consumption. It’s also the key factor accounting for the near-record fall in the carbon intensity of the energy mix,” bp Statistical Review said.

The lower crude oil demand also meant a crash in demand for petroleum products. “Use of jet fuel and kerosene is estimated to have plunged by 40 per cent (3.2 million barrels a day) as aviation across much of the world was grounded. Similarly, gasoline demand fell by around 13 per cent (3.1 million barrels a day) as road mobility measures crashed. In contrast, products most closely related to the petrochemicals sector (naphtha, ethane and LPG) were broadly flat, supported in part by increasing demand for PPE and other medical and hygiene-related supplies,” the review said.

“Over the year as a whole, global oil production is estimated to have fallen by 6.6 million barrels a day – again the largest fall in post-war history,” the review added.

But the biggest gainer during the pandemic year was renewable energy. “Despite the huge disruptions associated with the global pandemic and the collapse in Gross Domestic Product, wind and solar capacity increased by a colossal 238 Gigawatt (Gw) in 2020 – 50 per cent larger than at any time in history,” the review said.

“The main driver was China, which accounted for roughly half of the global increase in wind and solar capacity. The expansion in Chinese wind capacity (72 Gw) is particularly striking and it’s likely that some of the reported increase reflects various changes to Chinese subsidy and accounting practices. But even controlling for that, it seems clear that 2020 was a record year for the build-out of wind and solar capacity,” it added.
Source: Business Standard

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