Green shoots appear in Germany, Italy’s power market

Bloomberg

Italy and Germany showed signs that they’re beginning to consume more electricity, suggesting economic activity may be starting to increase in some corners of Europe hardest hit by the coronavirus.
In France and Spain, power use was steady in the past week, while Britain suffered a further slump. Those findings from grid operators shed light on how lockdowns to contain the health crisis are affecting the region’s economy.
Confirming those tentative indications of power demand from some of the biggest economies rely on the virus petering out in the coming months, allowing governments to re-open businesses that they have ordered shut.
“Countries will most likely return to previous habits around energy use as policy makers strive to return economies to normality following the severe health and economic shock,” according to DBRS Ratings Ltd.
European power and natural gas prices could take years to recover, according to Aurora Energy Research. The consultant estimates it could take four years for power prices and as long as eight years for natural gas in a scenario where lockdowns last into the fourth quarter.
Full-year demand that’s as much as 20% lower and depressed prices will dent profits for generators across Europe and cause higher-cost coal
and lignite stations to stay closed, according to Elchin Mammadov, an analyst at Bloomberg Industries.
While the demand picture looks more promising than a week ago, a comparison to last year shows the extent of the damage Covid-19 has had on industry. Following is a list of some of the impacts that grid and energy companies in the region are reporting:

Italy
Italy will present a plan this week to ease its lockdown starting on May 4, joining Germany, France and Austria in pursuing a gradual return to normality as coronavirus infection rates fall.
Power consumption at the morning peak rose 10% on April 22 when compared with a week ago, according to data from the network operator Terna SpA. The country’s drop in power demand has been one of the most stark in Europe, falling 26% last week compared with a year earlier, according to Entsoe, the grid industry group.
Germany
Germany has begun to lift its coronavirus containment measures, allowing smaller shops and schools to reopen.
Electricity use measured at midday rose for a third week on April 22, rising 2.6% from a week earlier, according to data from energy regulator Bundesnetzagentur. Demand has gained 5.7% from two weeks ago, the data show. Power demand in Germany has been less affected than other nations, with use 9.9% lower last week compared with a year earlier.

Spain
Spain’s steep decline in electricity demand shows signs of hitting bottom. There’s been little change in the afternoon peak during the last three weeks compared to the week before, the grid operator Red Electrica Corporacion said.
The nation’s new cases of the virus look to be stabilising too, with just a small increase in the number of new infections. PM Pedro Sanchez’s government has said that Spain is past the peak of the pandemic, while cautioning that the process of easing lockdown restrictions will be gradual and continue at least two more weeks. Demand was down 12% from a year earlier, according to Entsoe data.

The UK
UK power consumption on April 22 fell 3.2% during the morning peak from a week earlier, data from National Grid show. The decline comes after signs last week that the slump may be starting to ease in Britain, with overall consumption little changed. Electricity use was 29% lower last week compared to a year earlier period, and the grid operator has warned it expects to see an impact for months to come.