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How electricity use will track the success of the coming lockdown

Electricity is the heartbeat of a modern economy. Our electricity heartbeat increases when the country is hard at work, and slows when we are at rest.

The rapidly unfolding and unprecedented response to the threat of COVID-19 reminds us of the key services we rely on: healthcare, food, water and energy.

The ubiquity of electricity means it can also be a valuable diagnostic tool in these strange times. Electricity demand can reveal how effective we are at unfamiliar new behaviours: like locking down at home and isolating ourselves socially.

Northern Italy used to be famous as a global centre of design and industry. Now it is a live case study on how not to handle a pandemic, with a death toll of around 7000, the army called in and non-essential factories closed as the government tries to contain the COVID-19 contagion.

Early on, local political leaders appeared to underestimate the severity of the threat they faced. Their response, with the benefit of hindsight, was too partial and piecemeal: a month ago the containment strategy was to isolate infected towns and regions, rather than cause greater disruption. A full national lockdown was only enforced two weeks later on March 9.

As the initial restrictions were imposed, the leader of the ruling Democratic Party, Nicola Zingaretti, infamously posted a photo of himself having a drink in a Milanese bar urging his fellow Italians “not to change our habits”. Ten days later he had contracted the virus.

The normal pattern of electricity demand in northern Italy is as industrious and predictable as the region. Electricity use rises and plateaus during the working week and drops on weekend. It drops in August when northern Italy takes its summer vacation and over the new year break.

While individuals may be self-isolating, as a society we may be worryingly slow to shift our behaviour.

Demand is lowest at Easter and Christmas, when most Italians stay home to celebrate together and only those providing essential services are at work.

The concept of a government-imposed virus lockdown is new, so we are learning every day about what one looks like and how to measure it. Intuitively, an effective lockdown might look, and feel, like a cross between Christmas day and a quiet Sunday.

Based on data provided by Italian transmission company Terna, the initial February isolation of towns and regions had no measurable impact on electricity use. Only after the escalation to a national lockdown on March 9 did power use begin to change, falling as Italians started to substantially modify their behaviour and stay at home.

Even then it took another two weeks for electricity use to gradually decline, around 20 per cent lower than normal for this time of year. Weekdays are now weekends. Weekends have a similar profile to Christmas Day.

The consequences of this slow shift in true behaviour was reflected in rapid increases in reported infections and belated enforcement of lockdowns to try and contain the spread.

Closer to home a similar pattern is evident in Australia. Gradually escalating warnings and directions from government have hardly shifted actual electricity demand, which suggests behaviour change is still modest. Given around 70 per cent of demand is from the commercial and industrial sector, it suggests while individuals may be self-isolating, as a society we may be worryingly slow to shift our behaviour.

The eventual transfer of activity from office to home is likely to have mixed impacts. Household energy consumption is likely to increase, but this will be mitigated by lower electricity, gas and petrol prices.

This is mainly the result of a brutal global oil price war as Saudi Arabia and Russia attempt to exploit the COVID-19 pandemic to bankrupt the US shale oil industry.

The good news is softening electricity demand combined with mild autumn temperatures is expected to ease operational pressure on the grid.

The biggest reliability threat may be managing unusually low minimum demand events over Easter. When demand is very low the voltage in the grid can become harder to manage, exacerbated by about 10,000 megawatts of rooftop solar PV smeared across the grid.

The Australian Energy Market Operator (AEMO) has made timely plans to manage this future threat by lining up $72 million of new technologies, except they weren’t planned to go in until next year. The new low-demand future may arrive sooner than expected.

The other risk is ensuring there are enough power station and other key operational staff able to keep the lights on as the virus spreads. Shifts of key employees are being split to minimise this risk. Some US power companies are even exploring the idea of quarantining key staff to live at power stations until the peak of the threat has passed.

The seemingly inevitable full lockdown of Australian towns and cities is likely to pose new challenges and unlikely solutions. Australia has the largest houses in the world, driving urban sprawl and a car dependent culture that contributes to increased per capita greenhouse emissions.

For a few weeks at least, this chronic sustainability, transport and planning problem might be a blessing. There might be worse places to endure prolonged social isolation than an oversized, inefficient McMansion

Source: Financial Review