Impact of COVID-19 reduces global energy demand by 8%
We follow IMF’s Longer Outbreak case, which predicts a 6% reduction in world GDP due to COVID-19 in 2020 and a small 7% rebound in 2021. Growth will be impaired by the pandemic for a further half-decade, resulting in world GDP 9% lower in 2025 than it would have been without COVID-19.
Some pandemic-induced changes are likely to endure. Demand for aviation in 2025 will be 5% lower than previously forecast, while commuting is conservatively estimated to decline by 2% and office-space requirements by 1%.
Delayed growth and behavioural changes will see global energy demand reduce by 8% in 2020. It will pick up in 2021, but then fluctuates annually some 6-8% below our pre-pandemic forecast to 2050. With the drop-off in demand, oil and coal are most severely impacted, followed by gas, with renewables least affected. Transport energy use will never again reach 2019 levels, and the demand for steel and construction materials for office buildings will be significantly reduced.