Energy sector recovery scenarios from Covide-19 impact
The Covid-19 pandemic has caused more disruption to the energy sector than any other event in recent history, leaving impacts that will be felt for years to come, and in particular how it affects the prospects for rapid clean energy transitions.
It is too soon to say whether today’s crisis represents a setback for efforts to bring about a more secure and sustainable energy system, or a catalyst that accelerates the pace of change. The pandemic is far from over, many uncertainties remain and crucial energy policy decisions have yet to be made.
This Outlook explores different pathways out of the Covid-19 crisis, with a particular focus on the pivotal next ten years to 2030. At this hugely consequential moment for the energy sector and for the urgent global response to climate change, the WEO-2020 illustrates the historic nature of the choices, opportunities, and pitfalls that will shape where we go from here.
The Stated Policies Scenario (STEPS), in which Covid-19 is gradually brought under control in 2021 and the global economy returns to pre-crisis levels the same year. This scenario reflects all of today’s announced policy intentions and targets, insofar as they are backed up by detailed measures for their realization.
The Delayed Recovery Scenario (DRS) is designed with the same policy assumptions as in the STEPS, but a prolonged pandemic causes lasting damage to economic prospects. The global economy returns to its pre-crisis size only in 2023, and the pandemic ushers in a decade with the lowest rate of energy demand growth since the 1930s.