Britain’s electricity demand falls by a tenth in lockdown

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Electricity demand in Britain dropped by a tenth last week after the UK government imposed a lockdown to curb the spread of coronavirus. As businesses closed, the decline in average daytime demand also led to a fall in wholesale electricity prices as renewables such as wind and solar — which produce electricity very cheaply once built — now provide a greater proportion of the generation mix at the expense of gas plants.

GB day-ahead electricity prices fell 10 per cent last week compared with the prior week and were down 30 per cent year on year, according to S&P Global Platts. Analysts warn that the decline in wholesale prices could take a while to filter through to consumers because of suppliers’ hedging strategies.

However, the drop in demand volume could hit utilities that have significant operations supplying business and industrial customers, such as Centrica, Drax and EDF, said Deepa Venkateswaran, an analyst at Bernstein.

Average electricity demand had remained relatively stable until Tuesday but the lockdown announced by the UK government marked “the end of the normal energy pattern”, said Paul Verrill, director of EnAppSys, an energy consultancy.