INTERACTIVE: European power demand recovery halts

Author: Chetan Patel

2020/06/23

LONDON (ICIS)--Power demand across Europe continued its tentative recovery through June, although growth has been impeded by weaker consumption in the tourism and hospitality industries.

The average year-on-year power demand drop against the five-year average across the 13 European countries analysed by ICIS has eased since widening at the start of June.

But at -8.7%, the demand drop in the month to date remains one percentage point greater than in May.

With seven more days remaining, June is likely to be the worst hit month in terms of power demand across Europe since lockdown measures began.

The data does not take into account temperature fluctuations across the different years.

LEVELLING OUT

The data suggests that while overall demand is improving, the slower rate of recovery is likely due to a potential levelling out.

In Germany the demand drop levelled out at -11% in June, which was the same as both in April and May.

This is especially the case for countries which are more advanced in their lockdown exit strategy, suggesting that even when lockdown restrictions are lifted demand is unlikely to recovery to pre-crisis levels.

The demand hit has been exacerbated by lacklustre tourism in key hubs such as Italy, Spain and Greece.

Italy was in fact the worse hit country through June, with the demand hit averaging -16.6% compared to its five-year average, with Spain behind it at -13%.

Stricter restrictions on hotels and resorts and other tourism hotspots will likely keep a lid on demand recovery.

In the UK demand slightly recovered compared to May, and with restriction expected to ease further in July demand is set to recover further.

CEE/SEE

The region which saw the biggest improvement was central eastern and southeast Europe, where demand was 8% below the five-year average in June - two percentage points above May’s demand drop.

Romania was supposed to lift most restrictions on 15 June, but it extended its alert level until 15 July due to a sharp increase in COVID-19 cases. This was reflected in the overall demand drop in June, widening to -7.7% from -6.7% in May.

In the Czech Republic, the most advanced in terms of relaxing restrictions, demand dropped 7% in June compared to the five-year average.

Hungary will be looking to end the state of emergency towards the end of the week. As it stands, demand is currently down over 7% compared to the five-year average - a slower recovery than some of its neighbouring countries.

Additional reporting by Roy Manuell