The impact of COVID-19 on the UK energy sector

At the start of 2020, the renewable energy sector was one of the fastest-growing global markets. Demand was growing and prices were coming down. And with technological advancements pushing hard, everything was looking positive for the UK’s green energy suppliers.

But with the emergence of COVID-19, how has this affected the UK energy markets just twelve months later?

The impact of coronavirus on the UK’s energy sector

There have been positive and negative impacts on the UK energy markets, with things initially looking bleak this time last year. But this wasn’t necessarily a trend that continued into 2021.

So, with that in mind, let’s take a look at some of the key impacts the global pandemic has had on the energy sector:

One. Energy demands hit an all-time low – then recovered

In March 2020, the UK suffered a drastic reduction in energy demand by hitting a 45-year low. But with the easing of lockdown restrictions by August, demand was similar to 2019 levels, which resulted in an increase in the UK’s energy valuation.

Two. Energy provider switching decreased

Last year saw a 6.5% decrease in customers switching electricity suppliers, with December levels down by more than 10% compared to 2019 levels.

Three. Energy suppliers didn’t offer payment holidays

While other industries offered ‘payment holidays’ to their customers, energy providers didn’t, which led to a significant number of late payments and defaults.

Four. There was a dramatic decline in new business from certain sectors

With many businesses taking a hit during the pandemic, there was a dramatic reduction in new business for energy providers from the accommodation, arts, entertainment, food and recreation industries.

Five. Renewable energy use increased, contributing to the UK’s first ‘coal-free’ period

Carbon emissions plummeted due to fewer emissions at the height of lockdown, as well as an increase in renewable energy use. In fact, in data released by the Department for Business, Energy and Industrial Strategy, it was revealed that coal contributed just 0.7% of major plant power in the second quarter, with nuclear and renewable energy contributing 59.9% combined – all of which led to the UK’s first ever coal-free period in August 2020.

Six. Demand for oil fell

The pandemic saw oil demand fall dramatically, with OPEC cutting supply to the UK by almost 400,000 per day.

Seven. The Government announced its ‘Ten Point Plan’

In November the UK Government announced its ‘Ten Point Plan to reach net zero’, which promises to invest over 12-billion into green energy and create over 250,000 green jobs.

Eight. PV owners got a cash boost

The Feed-in-Tariff (FIT) scheme was replaced by The Smart Export Guarantee, which allows small scale renewable energy generators to be paid for the surplus energy they put back into the national grid.

Nine. Homes got an incentive to be green

The Green Homes Grant Scheme was announced in October 2020, a scheme that offers vouchers of up to £5,000 to homeowners to improve energy efficiency. Or install renewable energy tech in their homes.

Ten. The UK became a more attractive place to live

With the government announcing investment in onshore wind projects in the early rounds of the Contracts for Difference (CfD) scheme, the UK moved to fifth place in the ‘renewable energy country attractiveness index’ – a massive leap since 2016 when the UK wasn’t even in the top ten.

So, it seems that, although the pandemic has had a major impact on our day-to-day lives, it has been good news for the renewable energy sector. And for us as consumers, with the government announcing several schemes to help the UK reach its net-zero aims by 2050.

Ready to switch to renewable energy in 2021?

If so, the benefits of decreasing carbon emissions for your business are huge and can include:

• Long-term operational resiliency
• Reducing outgoings and costs
• Improving your reputation
• The opportunity to diversify your services

But to reap those benefits, you need a net-zero strategy that shows you what your business’s green future looks like – and Inteb can help.

Our team of experts can help you set achievable targets and put a framework in place to meet your net-zero targets. So, if you’re unsure what strategy is right for you. Or you’re unsure where to start, Inteb will work with you to put a strategy in place across your business.

Start using more renewable energy in 2021.

Let’s get the conversation started – call us now on 0151 601 3476