Renewable Business Energy Sector in the UK is Succeeding Amidst Lockdown
Some clues on how they’re handling “renewable energy” across the pond.
Renewable Business Energy Sector in the UK is Succeeding Amidst the Lockdown
The entire energy supply segment in the UK was thought to have been affected drastically during this pandemic since the very businesses which need their supplies have been either completely or largely shut down on account of the lockdowns. As it turns out, although the larger British economy has suffered quite tremendously, including the energy sector, the renewable energy business is fairing particularly well even amidst the pandemic.
Traditional Energy Providers Have Been Hit Very Hard by the Lockdown
As was to be expected, the drop in demand for electricity in the business segment started back in March when the UK, along with the rest of the world, really started to realise the gravity of the situation. To highlight some of the most prolific impacts, we have briefed the following facts:
- A number of coal/petroleum-based power plants are already out of business, with no assurance on whether they can return to the grid again
- Between April and May, demand for business energy in the United Kingdom has dropped a further 14%
- The price of commercial electricity has also been reduced to almost half the price of what it was back in 2019
The stats show a dismal picture which is representative of not just the business energy segment, but also the entire industrial segment in the UK.
How and Why the Renewable Energy Sector is Doing So Well
Clean energy production, demand and supply have all reached a higher level during the lockdown than they were at before. This is something that very few segments in any industry can say at the moment. To understand the how and why of this phenomenon, go through the following highlights:
- The weather and reduced air pollution has proven ideal for both solar and wind energy generation
- Solar energy managed to supply roughly 30% of the entire grid’s demand for electricity in April
- During the same time period in 2019, solar and wind in conjunction had contributed only 23% to the grid
- No coal-fuelled energy production units have been used for well over a month in the UK, as of May 18
The highly subsidised and protected nature of renewable energy, as ensured by the government mandates, have also played a huge role. They are, after all, protected from the surge and dip in electricity prices even during the lockdown, which is not something that the traditional sources of energy have enjoyed for obvious reasons.
How the Huge Drop in Price of Commercial Electricity Will Affect the Industry
Where there is excess supply in comparison to the demand, the prices will fall, especially if that reduction in demand was so sudden, unexpected and grand, as it was in this case. As a result of that reduced demand and fallen price, this situation has presented SMEs, in particular, with a huge opportunity.
Commercial energy prices have gone down by as much as 40% when compared with the price of business electricity observed during the same time in 2019. What this means is that businesses can now use this slump in both demand and price of industrial energy, along with the natural increase in competition between the existing non-renewable providers of energy to their advantage.
By comparing commercial electricity prices on sites like Utility Bidder, businesses are able to not only get extremely low-priced quotes from the top providers, they can also lower those quotes further. As they all compete to get customers on the platform by offering the best possible deal, it’s the consumer businesses that come out on top.
Any company that manages to sign a contract with the providers at the slumped price right now will be reaping the benefits even after commercial electricity prices begin to go up again, post lockdown. The price will still be adjusted to a degree of course, but those with a contract signed at this time will still enjoy a significantly lower price for their commercial energy needs, as compared to what concurrent prices would be in the near future.