Electricity under lockdown: cheaper, cleaner, but harder to control
14th September 2020
The latest Drax Electric Insights report shows the impact lockdown had on our electricity system. The report, conducted via Imperial Consultants, by academics from Imperial College London, is an independent analysis of Great Britain’s electricity system during the second quarter of 2020.
During April, May and June we saw our day-to-day lives shift considerably as a result of the COVID-19 pandemic and lockdown. With millions furloughed or working from home and shops shut down for weeks and months on end – there were unprecedented impacts on the power system too. Here, we look at some of the headlines:
Electricity prices plummet
During these months, power prices fell to their lowest in almost two decades, with Britain spending £1.3 billion less on electricity supply over the second quarter of this year compared to 2019. Lower oil and gas prices combined with a lower demand for electricity is to blame for this steep fall. Dramatic consumption changes mean that many large power consumers have had to reforecast their electricity usage.
Monthly average power prices over the last two decades, adjusted for inflation (presented in 2020 GBP)
Cost of staying in control soars
The cost of staying in control – that is, keeping Britain’s power system stable - soared in Q2. So much so that it now adds 20% onto the cost of generating electricity, quadrupling over the last two years.
Electricity supply and demand must be kept perfectly in balance to keep the grid stable and prevent blackouts. Previous Electric Insight reports have shown a steady increase in the cost for National Grid’s taking these actions, but recently they’ve skyrocketed (see below).
Balancing prices, which at the start of the decade added around £1/MWh to the cost of electricity, but last quarter surpassed £5/MWh for the first time, have risen in step with the share of variable renewables. The chart below shows that balancing prices have risen 35% above the level expected from previous trends, which is put down to, in part, that to keep the power system stable, more interventions are required than ever before.
Monthly average power prices over the last two decades, adjusted for inflation (presented in 2020 GBP) (left) Balancing price shown against share of variable renewables, with dots showing the average over each quarter since 2010 (right)
Records broken for solar and biomass
Unsurprisingly, electricity demand fell to its lowest levels this century, and coal power stations had their first full month of zero output.
The unprecedented change in Great Britain’s power system also presented some opportunities for renewables too. On the 30th May, solar power provided a third of the country’s electricity demand at its peak. Biomass also broke records, supplying a sixth of electricity demand the previous night.
Of all the 200 records tracked as part of Electric Insights, 38 were broken in the second quarter of 2020.
Britain’s electricity supply mix in the second quarter of 2020
Download the Electric Insights report below to see full findings below.Download Electric Insights report
Planning for uncertainty: What will the power market look like after the pandemic?
Will the UK electricity landscape ever return to ‘normal’? Since the first lockdown was introduced on 23 March 2020, electricity demand in the UK...
Power consumption slumps in Q1 2020 – see Drax Electric Insights Report
Right now, Great Britain’s electricity system is changing at a rapid pace. With pressures to decarbonise, replace old technologies with new, lower carbon ones...
Download our whitepaper: Helping you through uncertain times
The world of energy has changed radically since the beginning of the coronavirus pandemic. In the last few months, demand for electricity has fallen...