Electricity demand hit the same level as last year at the beginning of August for the first time since COVID-19 lockdown measures were introduced.
Lockdown measures created a sudden fall in electricity demand at the end of March and into April, with demand falling by ~15% below 2019 levels. However, recent research from Cornwall Insight shows that since July, there has been a gradual rise in energy demand back up towards 2019 levels.
In fact, demand hit the same level as last year at the beginning of August for the first time since COVID-19 lockdown measures were introduced. Furthermore, forecasts from Cornwall Insight predict that energy demand for the rest of FY2020-21 could stay much closer to levels seen in 2019-20. However, this remains highly uncertain with the potential for further lockdown measures and changes in economic output.
James Brabben, Wholesale Manager at Cornwall Insight, said:
"The rise in demand can be directly linked to the relaxing of lockdown measures and business starting to reopen. 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.
"There are concerns over the future economic performance, and the future trajectory of electricity demand will depend largely on how the economy returns to "normal" after the summer holiday season.
"However, Cornwall Insight expects demand for the rest of this financial year to be closer to FY19-20. This is due to the return of pupils to school and of some parents to work environments. 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.
"While the outlook for demand may be more positive than three months prior, hanging over this assumption is the considerable uncertainty of further nationwide lockdown measures. Such an event this winter would again have a material impact on the market, and despite our better understanding of the impacts would remain difficult to hedge and manage for market participants."