The coronavirus pandemic is expected to decimate energy demand across the world by 6% this year, an "unprecedented decline" that will hit hardest in advanced economies including the U.S. and Europe, the International Energy Agency said April 30.

The forecast would mean energy demand — most significantly for coal, oil and gas — is set to decline at seven times the rate seen after the global financial crisis of 2008, a drop on par with losing the entire energy demand of India. With fossil fuels hardest hit by the demand destruction, energy-related carbon emissions could fall back to 2010 levels this year, the organization, or IEA, said.

"This is a historic shock to the entire energy world. Amid today's unparalleled health and economic crises, the plunge in demand for nearly all major fuels is staggering," Fatih Birol, the IEA's executive director, said in a statement announcing the analysis, which is based on data covering about 100 days.

Demand for energy is set to fall by 11% in the EU and 9% in the U.S., the IEA projects, although it said the final impact is heavily dependent on the length and severity of measures to curb the spread of the virus. The group's analysis is based on assumptions that lockdowns will ease in the coming months, meaning the shock could be greater if restrictions stay in place or in the case of another outbreak later in the year.

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Oil companies have suffered particularly under the pandemic, as demand from road and air transport has been wiped out. In its April oil market report, the IEA projected that global oil demand will fall by a record 9.3 million barrels per day year over year in 2020 as production cuts agreed by global producers and G20 nations have so far failed to meaningfully counter the collapse in demand. The price of Brent crude, the European benchmark, has dropped to the lowest level in almost two decades, while West Texas Intermediate futures in the U.S. even slid into negative territory.

As a result of the market turmoil, Royal Dutch Shell PLC became the first of the so-called oil and gas supermajors to cut its dividend on April 30, after first-quarter profits dropped by 46% against the previous year. It marked the first time since World War II that the Anglo-Dutch company has reduced shareholder payouts.

"It is still too early to determine the longer-term impacts, but the energy industry that emerges from this crisis will be significantly different from the one that came before," Birol said.

Utilities have also been coping with a steep drop in electricity demand from industrial and commercial customers. Power demand has declined by about a fifth in countries with full lockdowns in place and the IEA estimates that demand for the entire year will be 5% lower than during 2019 — the largest drop since the 1930s.

The lower power demand has particularly squeezed coal and natural gas amid higher production from renewables, which have priority to feed into the grid in many countries. Germany has had a glimpse of a less coal-reliant future during the past weeks, as major generators like RWE AG throttled their thermal power stations due to both lower demand and wholesale power prices.

According to the IEA, global coal demand is now projected to fall by 8% in 2020, with coal-fired power generation declining by more than 10%, while natural gas demand will drop by 5% after growing each year over the previous decade.

The temporary drop in coal and gas production is proving a silver lining for the climate: Global carbon emissions related to energy use are set to fall by 8% this year, the largest drop ever recorded. But the IEA also warned that it expects a sharp rebound as economic activity picks up again, highlighting the need for promoting recovery plans that favor clean energy technologies.

Meanwhile, low-carbon sources including wind, solar photovoltaic, hydropower and nuclear power could reach 40% of global electricity generation as the IEA expects renewable electricity generation to rise by nearly 5% in 2020 thanks to new solar, wind and hydro capacity.

"Only renewables are holding up during the previously unheard-of slump in electricity use," Birol said.

But the growth in green power will still be smaller than anticipated before the virus, since supply chain disruptions are delaying construction of new power plants in many countries. Consultancy Wood Mackenzie has revised its outlook for solar installations in 2020 down by 17% due to the crisis and estimates a longer recession could put up to 150 GW of renewable projects at risk in Asia-Pacific alone.