The UK power market has been dominated by the gulf in demand left by the COVID-19 lockdown which started on the 23rd March, demonstrated in the graph above (Source: Cornwall Insights). This has seen the average power demand for the working week fall by approximately 20% over April.
Although the weather has a bigger influence on demand for gas, when it comes to power, increasing levels of embedded solar generation has impacted greatly. Embedded generation is electricity generation which is connected to the Distribution Network rather than to the high voltage National Grid. Embedded generation is typically smaller generation such as Combined Heat and Power (CHP) or renewable generation: small hydro, wind or solar power), connected at the distribution level, reducing transmission system demand. The increase in solar PV production, especially with the sunny April we’ve had, has increased this trend.
The impact of this increased solar PV production and the extra daylight hours will continue to weigh on transmission demand over summer months, but the gradual ease of lockdown measures should be an offsetting factor.
A recovery to pre COVID-19 demand levels is highly unlikely. Experts are no longer predicting a swift return to commercial and industrial activity levels seen before lockdown, and this will take its toll on demand. As a result of this, a surge in UK gas and power demand and the knock-on effect on prices this has had, is unlikely to be seen in the coming summer months.
The energy market has been favourable due to COVID-19, looking into the future it’s highly likely this trend will continue. Contact us here at the Utility Team to make the most of the currently favourable market and ensure you secure the best deal possible for your business.