Global power demand witnessed the biggest decline since the Great Depression due to the lockdown restrictions implemented to curb the COVID-19 pandemic. The demand for power is expected to decline by 6% in 2020, which is seven times more than the impact caused by the 2008 Global Financial Crisis, according to the World Economic Forum (WEF).
With the lockdowns being gradually eased, Verdict has tried to assess how long it would take for power demand to return to normal, through a poll.
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Analysis of the poll results shows that it may take up to six months for the demand to return to normal.
A majority 27% of the respondents opined that the power demand will take more than a year to return to normal, while 19% of the respondents felt that the same will take from six to 12 months.
Further, 53% of the poll respondents opined that the demand is likely to return to normal in less than six months, including 20% who voted that it will take from three to six months and 21% who opined that the demand recovery is expected to take up to three months. A minority 12% of the respondents opined that the demand will return to normal immediately.
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By GlobalDataThe analysis is based on 636 responses received from the readers of Power Technology, a Verdict network site, between 24 June and 26 August.
Recovery of power demand in the post-COVID-19 scenario
The global electricity demand declined by 20% during each month of lockdown imposed due to the COVID-19 pandemic. Domestic power demand increased by 40% as more number of people started working from home, but could not offset the decline caused by the temporary closure of businesses.
Recovery of power demand in the US to pre-pandemic levels is not expected until 2022, according to a report from CoBank, a national co-operative bank based in the US. The report notes that utilities should not depend on domestic demand as it may soon begin to weaken once lockdown restrictions are completely lifted.
The report also notes that utilities will need to either shift or defer capital spending amid the fall in demand while reviewing the performance of under-utilised assets.
The long-term decline in demand may lead to the retirement of coal-fired units and increase the share of renewable sources in the generation mix, according to the International Energy Agency (IEA).
