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Coronavirus’s Effect On The Electric Grid

Coronavirus Graphic

Within the past few weeks, every corner of the United States has felt the impact of COVID-19, including the US electric grid. As industries shut down to stop the spread of the coronavirus, the overall demand for electricity is expected to drop.

However, that is not the whole story. So in this post, we’re looking at an article by E&E, which interviews a few experts on the matter and tells us what exactly we should expect from the electricity industry this year.

Which Sectors Will Be Most Affected by Coronavirus?

Electricity, for our purposes here, will be broken down into three separate sectors.

  • Commercial electricity use – Commercial generally refers to businesses that directly deal with the consumer. Think things like a clothing store, hair salon or a bank.
  • Industrial electricity use – Industrial generally refers to entities that create/obtain goods. Think agriculture, mining and construction.
  • Residential electricity use – Residential electricity use is something we are all familiar with. It is the electricity used by private households.

Commercial energy use is expected to decrease the most as businesses and workplaces shut down to adhere to social distancing measures. Industrial sectors may decrease their usage, especially if more energy-intensive manufacturing sectors are impacted. However, how much industrial usage will decrease remains to be seen.

Residential electricity use, on the other hand, is expected to increase as many residents stay and work from home. But this will not make up for the more energy-intensive commercial and industrial sectors. This is why electricity demand will likely drop in 2020. 

Which Resources Will Be Affected by Coronavirus?

With electricity demand falling, resources that create electricity need to compete on price. Just another nail in the coffin for coal.

Over the past 10 years, coal has struggled to compete with natural gas and renewables like wind and solar. Generating energy with these resources is simply cheaper than coal. And with electricity demand falling, coal will find it even harder to compete.

Natural gas will likely take over some of coal’s generating capacity, but future increases in production may not go through if electricity demand stays low. 

Renewable energies like solar and wind will likely not be affected at all by COVID-19. According to Travis Miller, an analyst at Morningstar, renewable profitability is driven more by federal tax credits and policy goals.

Coronavirus’s Overall Effects On The Grid

Like pretty much everything today, COVID-19’s effect on the electric grid is far from certain. It all depends on how long this pandemic lasts and how long businesses are forced to shut their doors.

Given the opportunity to predict generation in 2020, analysts featured in the article say that they expect overall power demand to be flat at the very least, and quite possibly negative.

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