IEA (2020), The coronavirus crisis reminds us that electricity is more indispensable than ever, IEA, Paris https://www.iea.org/commentaries/the-coronavirus-crisis-reminds-us-that-electricity-is-more-indispensable-than-ever
The huge disruption caused by the coronavirus crisis has highlighted how much modern societies rely on electricity.
Millions of people are now confined to their homes, resorting to teleworking to do their jobs, e-commerce sites to do their shopping, and streaming video platforms to find entertainment. A reliable electricity supply underpins all of these services, as well as powering the devices most of us take for granted such as fridges, washing machines and light bulbs.
In many countries, electricity is critical for operating the ventilators and other medical equipment in the hospitals treating the soaring numbers of sick people. In such an unsettling and rapidly evolving situation, electricity also ensures the timely communication of important information between governments and citizens, and between doctors and patients.
These services shouldn’t be taken for granted. In Africa, hundreds of millions of people live without any access to electricity, making them far more vulnerable to disease and other dangers.
The coronavirus crisis reminds us of electricity’s indispensable role in our lives. It’s also providing insights into how that role is set to expand and evolve in the years and decades ahead.
Today, we’re witnessing a society that has an even greater reliance on digital technology to get on with day-to-day life, whose energy use is increasingly in the form of electricity, and where the power supply is more dependent than ever on wind and solar. In such a society, electricity security is the foundation of prosperity and stability – but ensuring that security requires action from governments.
In most economies that have taken strong confinement measures in response to the coronavirus – and for which we have available data – electricity demand has declined by around 15%, largely as a result of factories and businesses halting operations. Some of these economies, such as Spain and California, are among those with the highest shares of wind and solar electricity generation in the world. If electricity demand falls quickly while weather conditions remain the same, the share of variable renewables like wind and solar can become higher than normal.
In this way, the recent drop in electricity demand fast forwarded some power systems 10 years into the future, suddenly giving them levels of wind and solar power that they wouldn’t have had otherwise without another decade of investment in renewables. This is an important moment for our understanding of cleaner electricity systems, including some of the operational challenges that policy makers and regulators need to address to ensure electricity security.
With weaker electricity demand, power generation capacity is abundant. However, electricity system operators have to constantly balance demand and supply in real time. People typically think of power outages as happening when demand overwhelms supply. But in fact, some of the most high-profile blackouts in recent times took place during periods of low demand.
When electricity from wind and solar is satisfying the majority of demand, systems need to maintain flexibility in order to be able to ramp up other sources of generation quickly when the pattern of supply shifts, such as when the sun sets. A very high share of wind and solar in a given moment also makes the maintenance of grid stability more challenging.
System operators have developed ways to manage these challenges, but extraordinary developments – such as lockdowns of entire countries during global pandemics – create new tests. For example, the abrupt slowdown in industrial and business activity across much of Europe has reduced electricity demand, but it is also depriving power systems of a key source of flexibility. Under normal circumstances, large-scale electricity consumers such as factories can adjust their usage to help balance the system, but that option is hardly open today. This highlights the need for policy makers to carefully assess the potential availability of flexibility resources under extreme conditions.
Although new forms of short-term flexibility such as battery storage are on the rise, most electricity systems rely on natural gas power plants – which can quickly ramp generation up or down at short notice – to provide flexibility, underlining the critical role of gas in clean energy transitions. Today, most gas power plants lose money if they are used only from time to time to help the system adjust to shifts in demand. The lower levels of electricity demand during the current crisis are adding to these pressures. Hydropower, an often forgotten workhorse of electricity generation, remains an essential source of flexibility. Firm capacity, including nuclear power in countries that have chosen to retain it as an option, is a crucial element in ensuring a secure electricity supply. Policy makers need to design markets that reward different sources for their contributions to electricity security, which can enable them to establish viable business models.
Electricity networks are the backbone of today’s power systems and they become even more important in clean energy transitions. Most wind and solar farms, and all flexible power plants, are connected to the main power grid. In both Europe and North America, these grids rely on aging transmission lines to get the electricity to different regions. Significant investments in these networks will be essential in the coming years.
Wind and solar can also provide flexibility, and systems will increasingly rely on them to do so. Wind power can be gradually ramped down when demand drops late at night. Some solar power can be shut off at noon when there is more than needed. In time, electricity generation from renewables may no longer simply follow the weather but will have to be managed in an intelligent way in order to reduce costs and improve electricity security.
Thankfully for our electricity networks, most of the regions under strong confinement measures have so far avoided extreme weather conditions. For example, a situation in California that combined last year’s wildfires with this year’s lockdown measures would be extremely challenging.
Electricity networks are far more vulnerable than pipelines to extreme weather – a vital consideration for policy makers as they plan for increasingly electrified energy systems. The long-term task is to make networks tougher by investing in underground cables and decentralised storage – and by designing network layouts that are resilient to emergency situations such as hurricanes and floods.
Despite the increasing use of digital technologies in electricity systems, the coronavirus crisis has also reminded us of the essential role of skilled personnel. Network maintenance and repair is labour intensive and has to be done on site by workers and engineers. In most countries, governments have exempted network repair teams from the lockdowns. Organisations need to ensure staff members remain safe as they carry out their critical work. A key lesson of the current crisis is to make sure that electricity systems have sufficient resources not just of physical assets but also human capital.
The increasing digitalisation of the electricity sector has unlocked new opportunities to make systems more efficient and flexible. However, it has also made networks more vulnerable to cyberattacks. Rather than trying to treat cybersecurity as an add-on, policy makers need to put it at the heart of how electricity systems are managed and operated.
Electricity production is no longer solely the realm of big utilities. Factories, households and businesses are installing solar panels on rooftops and vacant land. New digital technologies are enabling these smaller users to sell any excess electricity generated by their solar panels to the wider grid. Many of these new producers may not have professional cybersecurity management tools for their mini-solar farms. This calls for regulations to ensure minimum standards for software, equipment and service providers.
Today's crisis highlights the critical value of electricity infrastructure and know-how, which are underpinning the response to the coronavirus pandemic. It also reveals some vital insights about the future of electricity, and what policy makers need to do in order to ensure that tomorrow’s systems remain reliable even as they are transformed by the rise of clean energy technologies. Governments are rightly focused on the immediate public health emergency, but they have to remain vigilant on electricity security and safeguard vital assets amid the extreme volatility in markets. In these extraordinary times, we can manage without many things, but we can’t manage without electricity.
The coronavirus crisis reminds us that electricity is more indispensable than ever
Dr Fatih Birol, Executive Director, International Energy Agency Commentary — 22 March 2020