The energy industry is on war footing as it prepares to fuel the coronavirus battle
16th March 2020 | Commercial Energy
Covid-19’s impact on the energy market could be profound. When the commercial breaks during Coronation Street start, the UK’s electricity networks are braced for the spike in demand triggered by millions of households putting on the kettle. That’s because the industry thrives on predictability – knowing where to direct electricity and at what times. All that is being turned on its head by Covid-19. As millions of people gear up to start working from home, energy suppliers are furiously modelling what these unprecedented patterns of demand could look like.
In Italy, where the country has been completely locked down since last week, electricity use has dropped. The centre of the outbreak, Wuhan in China, also saw a stark drop in energy consumption. But much of those falls came from the shuttering of heavy industry such as steel plants that have voracious appetites for energy. More broadly, power and heat demand in the UK has been steadily declining for several months now as the result of an historically mild winter.
From October until the end of February, the country recorded a 2.5 per cent drop in power demand – the biggest fall in a decade, according to S&P Global Platts data. Energy companies now have a new challenge. As the coronavirus escalates and scorches the global economy along the way, the networks and supplies responsible for ensuring the orderly transmission of power and heating are steeling themselves.
“They are well used to dealing with short-term disruption and spikes, and to be honest I think they’ll be fine,” says Glenn Rickson, head of European power analysis at S&P Global Platts. “Whatever patterns of demand we see they’ll be war gaming and planning around, there won’t be a sudden spike for half an hour – it’ll be trends that are emerging over time.”
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