The decline of fossil fuels is a death long foretold, but one that has yet to be realized in any meaningful way.

The signs have been plentiful: growing calls for fossil fuel divestment, major economies setting carbon neutral dates, plateaued global coal consumption, and the electric vehicle industry seemingly on the cusp of a breakthrough. Yet fossil fuels have retained their dominant position. In 2019, they accounted for 84% of primary energy consumption.

COVID-19 was a shock to the global economy if ever there was one. And many are calling for post-COVID stimulus spending to favor renewable generation at the expense of fossil fuels.

Will 2021 be looked back on as a turning point in the global pivot to renewable energy sources?

Background

Oil

It goes without saying that 2020 has been a rough year for the oil industry.

According to the latest OPEC projections, oil demand will come in at 90 million barrels a day (bpd) in 2020. This is 9.8 million fewer barrels than in 2019, representing a year-on-year drop of around 10%. 2021 will not bring much relief, as global demand is expected to reach 96.3 million bpd amid a slow and uneven global economic recovery.

The OPEC projections share something in common with those from the IEA and US EIA – none of them foresee oil demand getting back to its 2019 levels by the end of 2021.