Policy Wise: India’s Power Sector

Global Energy Review 2020, Report

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Global Energy Review, 2020

Mains level : India's emergency demand

Covid-19 is having a ripple effect on the global energy space. Consistent lockdowns have reduced energy demand by almost 30 per cent in India.

Covid-19 shock global energy demand

  • The IEA’s Global Energy Review studies the impacts of the Covid-19 crisis on global energy demand and CO emissions.
  • The projections of energy demand and energy-related emissions for 2020 are based on assumptions that the lockdowns implemented around the world.
  • It projects a 6 per cent fall in energy demand in 2020 — seven times the decline after the 2008 global financial crisis.
  • Electricity demand is set to decline by 5 per cent in 2020, the largest drop since the Great Depression in the 1930s.

Global Energy Demands

  • The countries in full lockdown are experiencing an average decline of 25% in energy demand per week, while in those with a partial lockdown, the fall in energy demand is about 18% per week.
  • Global energy demand declined by 3.8% in the first quarter of 2020 compared to the first quarter of 2019.
  • Further, it is expected that the impact of Covid‑19 on energy demand in 2020 would be more than seven times larger than the impact of the 2008 financial crisis on global energy demand.

Considering the above scenario the global demand of various energy sources can be analysed as given below

   Coal Demand:

  • It has been declined by 8% compared with the first quarter of 2019.
  • The reasons for such decline include, China – a coal-based economy – was the country hardest hit by Covid‑19 in the first quarter and cheap gas and continued growth in renewables elsewhere challenged coal.

Oil Demand:

    • It has declined by 5% in the first quarter, majorly due to curtailment in mobility and aviation, which account for nearly 60% of global oil demand.
    • The report also estimates that the global demand for oil could further drop by 9% on average in 2020, which will return oil consumption to 2012 levels.
  •  Gas Demand:
    • The impact of the pandemic on gas demand has been moderate, at around 2%, as gas-based economies were not strongly affected in the first quarter of 2020.
  •  Renewables Energy Resources Demand:

    • It is the only source that has registered a growth in demand, driven by larger installed capacity.
    • Further, the demand for renewables is expected to rise by 1% by 2020 because of low operating costs and preferential access for many power systems.
  •  Electricity Demand:

    • It has been declined by 20% during periods of full lockdown in several countries.
    • However, the residential demand is outweighed by reductions in commercial and industrial operations.

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.

Data on renewables

  • After overtaking for the first time ever in 2019, low-carbon sources are set to extend their lead this year to reach 40 per cent of global electricity generation — 6 percentage points ahead of coal.
  • Electricity generation from wind and solar PV continues to increase in 2020, lifted by new projects that were completed in 2019 and early 2020.

Back2Basics: International Energy Agency (IEA)

  • The IEA is an autonomous organisation which works to ensure reliable, affordable and clean energy, headquartered in Paris, France.
  • It was established in the wake of 1973 (set up in 1974) oil crisis after the OPEC cartel had shocked the world with a steep increase in oil prices.
  • India became an associate member of the International Energy Agency in 2017.
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