The imposition of stay-at - home and industrial shutdown orders has reduced demand for and consumption of electricity across geographies. The capacity factor at power stations has decreased and the reductions in renewable energy have increased. The efforts made to curb the spread of Covid-19 have affected the power utility business.
Recently, a survey was conducted to assess how the sector is concerned about the decline in electricity demand in the current situation of the Covid-19 lockdown. www.power-technology.com readers participated in the survey between 26 March and 27 April.
Results of the survey conducted over the period show that 21 per cent of respondents were very concerned about the declining demand for electricity, and about 20 per cent of respondents were slightly concerned about the falling demand. Whereas the survey shows that 19 per cent of respondents are neither concerned nor unconcerned, 13 per cent of respondents are not very concerned and 26 per cent are not concerned about the impact of Covid-19 on electricity demand. The analysis was based on 381 responses received over the period mentioned above.
Covid-19 impact on electricity demand: What leading analytics firm GlobalData says
Global energy demand for Q1 2020 decreased by more than 3.5 per cent compared to Q1 2019. More than half of the global population under restricted lock-down, energy demand is still projected to be lower in Q2 and Q3 2020. Global energy demand is projected to fall by 6% in 2020 compared to 2019. The IEA data analysis for 30 countries through mid-April shows that the level of energy demand is driven by the length and severity of the lockdowns imposed.
Country-level load impacts show that the reduction in total demand is in proportion to the reduction in industrial and commercial loads. States or provinces that had the majority of confirmed cases have seen a further decline in electricity demand as lock-downs have been extended and only essential undertakings have been allowed to operate. Power sectors in the United States , the United Kingdom and India have seen their country-level demand for power fall significantly from 15 % to 20% during the survey period.
According to the short-term outlook of the US Energy Information Administration ( EIA), US electricity consumption will collapse by a record 4.6 per cent in 2020 as businesses shut down due to government lockdowns to slow the spread of coronavirus. The total US energy demand projected by EIA will fall to 3.716 billion kilowatt-hours ( kWh) in 2020 from 3.896 billion kWh in 2019. The major drop from the commercial and industrial sectors shows a drop in power demand of more than 6 per cent in 2020 compared to 2019, as many offices close and factories shut down or run at reduced capacity.
Countries, like Italy, Spain and France, are experiencing a decrease in electricity demand, at a rate of 15-25 per cent, while electricity prices in Europe have dropped by about 20 per cent since the beginning of the year. The decline is attributed to the downturn in economic activity following the lockdown due to the coronavirus outbreak. Electricity consumption leveled in Germany, France and Italy after falling for several weeks due to restrictions aimed at stemming the spread of coronavirus, but demand continued to decline in the United Kingdom and Spain.
Decreased demand for electricity has also led to a major shift towards low-carbon electricity sources, including wind , solar photovoltaic ( PV), hydropower and nuclear power. Low-carbon sources are set to expand their lead to reach 40 % of global electricity generation by 2020. As a result, the combined share of gas and coal in the global power mix is set to fall by 3 percentage points in 2020. Coal-based generation is expected to hit the most, with a decrease of approximately 10% and a decrease of approximately 10% in natural gas.
Renewables is set to be the only energy source to grow in 2020 due to additional capacity as a result of projects completed in 2019 and early 2020, preferential access to grids and low operating costs. Despite the challenges of supply and logistics during Q1 2020, solar PV and wind are expected to increase renewable electricity generation by 5 per cent in 2020 with the help of higher hydropower output.
GlobalData anticipates that global demand for electricity will continue to slow down in Q2 and Q3 2020. As most countries see their emergencies lifted and allow industries to resume their operations in order to bring the economy back on track, easing lockdowns will not lead to an immediate rebound in demand, as economic activity will remain depressed for the whole of 2020. Although demand has shown an upward trend in countries following the lifting of lockdowns, it will be a while before it reaches normal demand levels.
