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Where has all the load gone?

By Ahmed Bekhit, Nick Turman-Bryant, Alireza Bozorgi, and Steve Fine
Supervisor, Energy Market Analytics
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May 8, 2020
4 MIN. READ
An initial multi-regional analysis of the impact of the COVID-19 shutdown.
 

With most of the country covered by stay-at-home orders, we are collectively adjusting to a “new normal,” where more of life is lived at home. In this new world, the distinction between weekday and weekend is blurring, as people, freed from the morning commute and sending kids to school, sleep in later and spend more of the day inside. Within those walls, electricity offers us the semblance of the life we had before, enabling us to work, connecting us to co-workers, friends, and family, and entertaining us with endless hours of binge-worthy shows. Yet, as electricity reminds us of normal life, what’s happening to electric demand is anything but. Our recent analysis provides an indication of how peak demand has changed across the country, raising important questions as we enter the summer season.

What our analysis shows is that electric demand is dropping, shifting, and still stabilizing. As expected, the drop in economic activity resulting from the closure of many businesses and office buildings and scaling back or shutdown of some manufacturing operations has resulted in a net decline in electric demand. Since the week of March 16, when we started tracking the data, through the week of April 26, we have seen weather-normalized demand fall by between 6% and 21%, with an average decline over the period of 10% across the regions evaluated, as shown in Figure 1 below.

Interestingly, while we observe some variation across regions, with patterns likely depending on (1) the pace and scope of commercial closures and reopenings, (2) the pre-pandemic contribution of commercial load to overall demand, and (3) residential behavior patterns, on average, the load decline started quickly and appears to have settled into a relative steady state somewhere around the beginning of April.  We continue to monitor the demand data from these regions to understand if we have indeed reached a steady state, whether load will continue to fall, or with some of the gradual reopenings, whether we will see a detectable increase.

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As commercial activity slows, the relative share of total load is shifting from commercial and industrial (C&I) to residential. For example, in New York, the shift has been from 65% C&I and 35% residential pre-pandemic, to 53% C&I and 47% residential during our evaluation window.  This shift in the relative share of total load can be seen in all other regions as well, as seen in Figure 3 below. On net, however, the overall demand has fallen. 
In addition to our analysis highlighting the shift in demand from C&I to residential, we are also seeing a shift in load shapes. Typically characterized by steep ramp-ups in the morning, as people prepare to leave the house, and the early evening, as people return home, what we are seeing is a general flattening of the load curve, with a more gradual morning ramp up, resulting in weekdays more closely resembling typical weekend patterns. For example, NYISO reports 8% reduction in daily energy by week for the weeks endings March 18 and April 4 in a report published on April 13, 2020. Daily load shape has shifted down with late morning peak similar to weekends and snow days.

In some states, initial data suggests an almost immediate leveling off, where the variation from week to week is small. However, for many states, it remains to be seen where and when that leveling off will occur, particularly as summer takes hold and we all switch on our air conditioners to keep us cool during hot days at home.

For a system designed to meet peak loads, the assumed reduction in demand may not seem like a problem. However, for a veteran industry that was already coping with massive change, this rapid disruption and lingering uncertainty does raise some important questions, such as:

  • Will these trends persist, creating a new normal, for system planners to predict and plan for? For example, the recovery in electric demand from the 2008 recession took almost six months, and even then demand was 2 percent lower than normal conditions.
  • How will changes in supply and demand affect grid operations and bulk power markets, particularly if the shutdowns continue into the peak load summer season?
  • In the cost of service world of ratemaking, does shifting load require a revisiting of rate structures?
  • Faced with declining utility revenues at a time of broader economic challenges, how do we ensure continued investment in the system while protecting customers?
We are continuing to monitor the situation, bringing together experts from across ICF to help the industry make sense of the “new normal” that is changing everything, including the electric system.
By Ahmed Bekhit, Nick Turman-Bryant, Alireza Bozorgi, and Steve Fine
Supervisor, Energy Market Analytics
Ahmed Bekhit's Recent Articles
Engaging smart home users for energy savings
Senior Manager, Energy Market Analytics
Alireza Bozorgi's Recent Articles
Don't sell yourself short on non-energy benefits
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