A new normal for the energy industry

16 July 2020

The current pandemic is a global crisis that has posed a significant impact on every industry and forced many countries to impose lockdown measures. As a result, power demand has decreased by 10% across Europe. Nearly half of the electricity generation has been met by renewables, and the level of CO₂ emissions has declined by 15%.

As the rate of infection has started to slow down in many areas, societies and economies are cautiously reopening. People start to discuss how to best prepare for the future – a new normal life post-COVID-19. With restrictions being lifted in several countries; will we see the energy industry be back to ‘business as usual’?

Signs of recovery in electricity demand

In the last couple of weeks, electricity demand in Europe has shown the trend of recovery gradually. From an average decline of 10%, the load last week (week 28) was only down by 4.4% compared to the same week last year. This is the narrowest gap since mid-March when the majority of the European countries started to implement the restrictions. During recent weeks, the electricity demand has been even higher than the pre-pandemic levels in several countries such as Norway, the Netherlands and Switzerland.

Given the steady increase in electricity demand in most countries; do we expect the rise of inflexible generation again in the electricity mix, and are the golden shiny days of renewables over?

Renewables still shows its resilience

The data from Wärtsilä Energy Transition Lab shows that during last week (week 28) in Europe, coal generation continued its declining trend (down by 26.7%), while renewable generation still maintained a significant share in the power mix (42% of total generation, an increase of 8.8 percentage points versus the same week last year). Renewables have been the most resilient sources of electricity generation in the face of the pandemic, and still stands strong during the recovery period. One day to highlight so far this month is Sunday 5 July, as we witnessed a new record with the highest share of renewables in Europe so far this year – an impressive amount of 55%!

The trend can be observed across most of the European countries. For example, in France and Spain last week, the electricity demand was already close to last year’s level, and the renewables share in the mix still enjoyed its upward trend with a healthy increase of 8 and 12 percentage points respectively.

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