The IEA foresees a record 20% drop in 2020 in energy investment



Investments in energy were well targeted at the beginning of the year with an expected global increase of 2%, but the coronavirus crisis has thrown everything to the ground and a record 20% drop is now expected, according to the International Energy Agency ( IEA).

In its annual investment report, published this Wednesday, the IEA indicates that there will be a loss of almost 400,000 million dollars, something that according to its executive director, Fatih Birol, is "deeply worrying".

Birol warns that the correct provisioning of the market when the economy recovers may be threatened with possible tensions, particularly in oil; job losses and that the transition to a more sustainable energy system is put at risk.

MILLION LOSSES FOR COMPANIES AND STATES

The combined effect of the decrease in consumption, the collapse of prices and the non-payment of bills will translate this year into a loss of a trillion dollars in the income of companies in the energy sector and of the States.

By sector, oil and gas as a whole is the most affected, with a drop of 32% in investment, which is equivalent to nearly $ 250 billion less.

In the case of shale deposits, which have higher operating costs and therefore lower profitability than conventional wells, the disaster will reach 50%.

The agency warns that if oil investments were to remain at levels to fall in 2020, crude oil supply capacities by 2025 would be about nine million barrels a day less than estimated before the coronavirus crisis.

To illustrate the slowdown caused by the pandemic in black gold, the IEA explains that in April, when there were more than 4,000 million people under some form of confinement, consumption fell by about 25 million barrels per day compared to the same month last year. year, which means a quarter of the total.

In 2020 as a whole, demand for crude oil will decrease by an average of 9 million barrels per day, that is, it would return to 2012 levels.

In the case of gas, the decline has been much more moderate, of 2% in the first quarter, although the authors of the report warn that in all of 2020 the decrease could be much greater.

The decline in investment in coal this year will be 15% and 10% in electricity, with a contraction that will also affect renewable energy, which will be around 10%.

NEGATIVE IMPACT ON RENEWABLES

The agency says that only in the first quarter the crisis has had a strong impact on the installation of solar panels on the roofs of homes and businesses, and that projects for new wind and solar capacities have dropped to levels of three years ago.

Particularly worrisome for the advancement of the energy transition is the planned reduction in 2020 of investment in electricity networks (9%) and in energy efficiency measures (from 10 to 15%), in the latter case due to the drop in activity in the car and in construction.

However, the weight of renewables in electricity production in relative terms will increase due to their low operating costs and the preferential access they have to the networks.

The new energy landscape that the crisis will leave will have as a counterpart in 2020 an 8% reduction in global emissions of carbon dioxide (CO2), down to 2.6 gigatons, that is, the volume of ten years ago.

It will be the largest decline recorded so far, six times higher than the previous one that occurred in 2009 during the financial crisis.

However, Birol warns that this reduction in polluting emissions comes for "bad reasons" and that if this goal is to be achieved on a lasting basis, "a rapid increase in investment in clean energy is required."

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