In an article for Forbes, Guidehouse explains how the coronavirus has created a drastic decline in energy consumption and how utilities should plan for future recovery
COVID-19-related social distancing restrictions have forced many people to stay home. As a result, European utilities are seeing a 10%-20% decline in energy demand and a change in electricity consumption patterns.
In an article for Forbes, Benjamin Grunfeld, partner at Guidehouse, outlined these recent changes and the steps needed to navigate recovery.
According to the article, several factors are changing energy demand patterns, including the every-day-is-a-weekday phenomenon, which is causing higher imbalance costs for retailers and generators due to forecasting errors; less consistent routines and empty workplaces, which are impacting morning and afternoon electricity consumption; and growth in distributed solar PV capacity combined with sunny weather.
While this drop and pattern change in energy consumption is not expected to be permanent, when and how it comes back is unclear. Grunfeld advised utility executives to be prepared to navigate their organizations through a turbulent economic recession and outlined three electricity demand recovery phases he expects for Europe:
“Players across the value chain need to assess the levels of uncertainty they face, incorporate scenario planning into business operations, build inherent flexibility and resiliency into their systems and processes, and accelerate digitization efforts in preparation for the new normal,” he said.