EU quarterly energy report: impact of Covid-19 on electricity and gas market still considerable

 The EU released the energy report for the second quarter of 2020. Here are the figures of the Covid-19 impact:

"The widespread lockdown measures across much of Europe earlier this year had an unprecedented impact on the EU energy market, causing gas and electricity consumption to fall by 10% and 11% respectively in the second quarter, according to the Commission’s quarterly reports on gas and electricity markets which have just been published. Comparison with the second quarter of 2019 also shows the deep impact across the whole of the economy – with a 14% fall in GDP. At the same time, lower consumption and rise in solar generation contributed to renewables taking a 43% share of the EU power mix in Q2 2020, a new quarterly record – and highlighting again the exceptional impact of the crisis.  

The electricity market report shows that electricity consumption dropped by 11% in the EU27 compared to Q2 2019. Wholesale power prices decreased by 30-50% and reached levels not seen in more than a decade. Fossil fuels were the main losers from this demand shock and this coincided with a surge in solar generation – to the extent that solar energy accounted for 9% of the EU27 power mix.2

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The gas market report is also dominated by the direct and indirect impact of the covid pandemic. The collapse in demand linked to the suspension of so many economic activities led to a decrease in gas consumption of 10% in the EU in Q2 2020. In some Member States, gas consumption was down by 20-30% in April relative to the same period in 2019.

Demand for natural gas was subdued not only in industry, but in power generation as well, as the abundance of renewables did not favour gas, even amid steeply falling gas prices: wholesale prices fell by 50-60% in year-on-year comparison. By the end of May, the TTF spot gas price fell to record lows (3.5€/MWh), slowly rebounding in June 2020 amid easing of the Covid-19 related lockdown measures.

In the context of low demand for gas in the EU, wholesale gas prices on some hubs fell below their US peers in May, resulting in the cancellation of some LNG shipments. Retail prices for an average industrial customer fell by 11% in Q2 2020 year-on-year and household customers also enjoyed lower prices in the majority of the EU capital cities."

You can read the rest of the piece via the below link:

https://ec.europa.eu/info/news/market-reports-2nd-quarter-highlight-impact-covid-lockdown-electricity-and-gas-markets-2020-oct-12_en