As governments of countries where Coronavirus is spreading are shutting down businesses deemed as non-essential, the economy is headed towards a widened closedown. The sector of utility is also seeing negative changes in terms of lowered demand for electrical power in certain countries and areas.
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Italy Seeing Declines in Electricity Demand
As the Electric Power Research Institute (EPRI) is reporting, since the beginning of the country’s lockdown, when Italy closed all non-essential businesses, the demand for electricity went on a decline. To prevent the wider spreading of the virus, Italy had to close all businesses that are not essential for everyday “survival”, which is when the country has seen the peak of electricity reduction by 21% year-to-year. The highest reduction rate was noted seven days after the lockdown.
United States: Utilities Will More Likely See Declines in the Following Term
As the number of infected people is rising amidst the COVID-19 fall down, the economy is going down at a slow pace as well. Grid operators in the United States claim that it is still early to talk about usage declines in utility. However, it is evident that there are already usage declines in the sector. In the meanwhile, S&P is predicting a recession this year. Additionally, the economy in the US is predicted to go through a partial recovery in the second half of the year.
North American Utility Ready for COVID-19
Although there will be a reduction in usage of electric energy, especially in the industrial sector as many non-essential businesses are closed for business during the crisis, the reports claim that the majority of North American utilities that are regulated are ready for such scenario. That means that the utility sector shouldn’t suffer a great portion due to the reduction in usage. Due to the low demand, utilities will collect lower bills. However, once the recovery steps up, utility providers may ask regulators to increase utility fees to annulate losses.
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