Demand for power plummeted as Covid-19 measures kicked in, but levels now look to have returned to that seen last year, according to Cornwall Insight
Electricity demand in Britain looks to have returned to relatively 'normal' levels, having plummeted during lockdown as businesses shut up shop, major industries wound down, and millions of workers were furloughed or worked from home, a fresh analysis indicates.
After the government implemented measures aimed at combating the Covid-19 outbreak in March, demand for electricity in Britain initially fell 15 per cent below 2019 levels. However, levels saw an uptick in July and by the beginning of August were once again on a par with demand levels seen in 2019, according to a new analysis from energy consultancy Cornwall Insight.
The government may be struggling to convince businesses to order staff back to the office given millions of people are still working effectively from home. But the increase in power demand suggests wider UK economic activity has risen as lockdown measures have eased.
The analysis released yesterday by Cornwall Insight forecasts that energy demand for the rest of the year is likely to remain similar to 2019-20, but it acknowledged that projections remain highly uncertain, given the potential for new lockdown measures if the coronavirus pandemic worsens.
"The rise in demand can be directly linked to the relaxing of lockdown measures and businesses starting to reopen," said James Brabben, wholesale manager at Cornwall Insight. "The warm weather spell in early August can explain some of the recent rise as this will have likely caused a higher demand for air conditioning and cooling. However, there is a clear overall trend of demand recovery from the previous lows experienced in the GB market."
He added that unless further lockdown measures are imposed the lows in energy demand observed earlier in the year are now likely to be over - even if many people continue to work from home.
"This is due to the return of pupils to school and of some parents to work environments," Brabben explained. "Even if many employees choose to work from home, our modelling suggests that demand may be boosted further by workers not returning to office environments. This is because lighting and heating used in households are typically far less efficient than in businesses."
Previous analysis from LSE and Drax found that the sudden decline in power demand reduced the need for fossil fuels and enabled renewable energy sources to meet the lion's share of the UK's power demand, reaching a record peak where renewables met 70 per cent of power demand.
However, it also found that reliance on intermittent renewable power sources put substantial stress on the grid, with the cost of balancing the grid rising from five per cent of wholesale power prices to around 20 per cent, providing a glimpse of some of the challenges the UK's electricity system will face as it transitions towards net zero emissions. Last month energy regulator Ofgem announced a review of grid management during the lockdown period, after balancing costs soared to £718m.
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