The long and short term effects of lockdown on the UK energy sector

At first glance, one might think that energy demand will have surged during the COVID-19 pandemic, as households stay locked down to limit the spread of the disease. However, electricity usage is significantly lower than normal, according to National Grid ESO.

That’s because there has been a marked reduction in the use of energy from the nation’s biggest industrial consumers. With most large-scale factories working under significant restrictions, electricity usage during typical working days was like that of a weekend or Bank Holiday in the final week of March. It was 1975 since electricity demand was as low as this, which further serves to reaffirm how the lockdown has altered how businesses operate.

Although the data is not yet available for April’s consumption figures, it has been predicted that demand will have slumped further still last month to figures not seen since the 1960s. What does this mean for the UK’s energy grid? It is likely to result in a plummet in carbon intensity levels. Carbon intensity is based on how much CO2 is emitted per every kilowatt-hour of energy that is consumed.

Could the COVID-19 crisis lead to a ‘renewable generation’?

If energy demand really has scaled depths not seen in 50-60 years, there is no doubt that renewable energy will become a bigger player in the ‘energy mix’. Reduced carbon intensity is something that should be celebrated for our wider environment, helping our nation to evolve into a more sustainable, greener energy network and meet targets of zero-carbon electricity by 2025.

The innovation that is fostering a renewable revolution

The National Grid ESO has sought to limit the return of higher levels of carbon intensity in the months and years ahead by exploring the delivery of inertia using new technologies. These innovations are designed to deliver inertia – the energy stored within our electricity systems – without simultaneously providing electricity, encouraging renewable generation and a more stable grid.

It has also been possible for the grid to utilise and trial solar and wind technologies to handle key aspects of the electricity system too. Last year, the National Grid ESO sampled solar technology overnight to balance the voltage support to the grid, designed to limit bottlenecks and improve the efficiency of energy distribution. Even smart charging devices for electric vehicles are being programmed to charge devices when the grid’s levels of carbon intensity are at their lowest. Future EVs will also be able to transfer excess energy back to the grid too.

Innovation is key to ensuring that sectors of all shapes and sizes never rest on their laurels. Research and development (R&D) encourages new, more productive ways of thriving. If your business has undertaken an R&D project and sought a scientific or technological advance or solution to uncertainty, the chances are you will be eligible for R&D tax relief.

Arrange a free consultation with our team of experienced and approachable tax incentive advisors today. At Kene Partners, our mission is to help innovative companies access millions of pounds of government money set aside to foster innovation. Your business could be next.