Blog Post
UK Energy Usage Falls by 10% due to Coronavirus Lockdown
Matt Olney • Apr 06, 2020
According to new data, the amount of energy being used in the UK has fallen by 10% as a result of the lockdown caused by the Coronavirus pandemic.
Energy Bill income falls
The decline in demand isn’t good news for energy suppliers already struggling to turn a profit with concerns mounting that the longer the lockdown continues more companies will find themselves in financial difficulties.
The biggest cause for the fall in demand is the lockdown that has forced businesses up and down the country to close their offices. Restaurants, shops and factories contribute some of the highest levels of demand for energy, but all are shuttered.
Even with many now working from home the demand for energy from domestic falls far short of the demand provided by businesses, industry and manufacturers.
Financial support for energy suppliers?
Energy UK, a trade body for energy suppliers has asked the government to create a loan scheme worth £100 million a month to assist suppliers with offering payment holidays to their most vulnerable customers and businesses who will struggle to pay their bills as a result of the pandemic.
Analysts are concerned that if bad debts rise more energy supply businesses will be forced to close.
The market has always been a challenging one, but the pandemic adds even more extra challenges as to whether a business succeeds or not.
Details of the proposed loan scheme have yet to be worked out, but the idea is for the government to extend the money to suppliers, who would then return the funds once customers were able to resume payments.
“The whole industry is working hard to ensure that customers receive reliable services and the support they need during this difficult and unprecedented situation. We know many more customers than usual will be facing financial difficulties right now and suppliers are working tirelessly to identify those who need additional help, particularly those customers in vulnerable circumstances. At the same time, we must pay tribute to the many energy workers who are on the front line delivering this essential service, and doing so in line with Government guidelines and following the highest levels of hygiene in order to keep customers and staff safe,” said Audrey Gallacher, Energy UK's chief executive.
Falling Energy Prices adding to the squeeze
The Coronavirus pandemic is also impacting energy suppliers as it continues to weigh heavily on global energy prices.
The wholesale price of electricity in the UK markets fell to as low as £28 per megawatt at the end of March well below the £44/MWh price recorded at the same period in 2019.
Negative electricity prices
One bright point for consumers during the pandemic is that households on new energy tariffs have been paid to use electricity during the day as sunny weather and strong breezes created a glut of clean electricity that surpassed the UK’s lower energy need.
Previously, consumers were only paid for their energy usage overnight but due to the impact of the lockdown and improved weather, more homes will earn money from their usage.
Further Reading
Declining Business Energy use is hitting Energy Suppliers and Cop26 Postponed to 2021
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