Large-scale investment in ‘clean’ energy technologies must be at the heart of the stimulus packages currently being developed by governments to mitigate the economic damage caused by the coronavirus, the Executive Director of the International Energy Agency (IEA), Fatih Birol, said on Saturday 14 March.
“Governments can use the current situation to step up their climate ambitions and launch sustainable stimulus packages focused on clean energy technologies”, said Mr Birol.
He said that the current situation is more favourable than in previous periods when governments launched stimulus packages, because the costs of major renewable technologies are much lower today.
“Meanwhile, hydrogen and carbon capture are in need of major investment to scale them up and bring down costs”, he added, noting that governments are directly or indirectly responsible for more than 70% of global energy investments.
In the absence of such measures, Mr Birol fears that the combination of the coronavirus and volatile market conditions could divert the attention of policy makers, business leaders and investors from the energy transition.
He also sees a risk in the sharp drop in oil prices caused by the coronavirus, which could reduce the impetus given to energy efficiency policies leading to an increase in energy consumption.
“It [the fall in oil prices] reduces the appeal of buying more efficient cars or retrofitting homes and offices to save energy”, he said.
Finally, Mr Birol believes that coronavirus is also threatening the transition because of the slowdown in China's economy, which is the leading producer of many ‘clean’ energy technologies, such as solar panels, wind turbines and electric car batteries.
While they have not yet made themselves felt in the EU wind market, “the impacts of a slowdown in Chinese manufacturing production are already visible in other countries”, said Giles Dickson, CEO of WindEurope, an organisation representing the European wind energy industry. (Original version in French by Damien Genicot)