“I think it will be depressed this year and to some extent next. This depends in part on the economic recovery, which will depress prices,” he said at a virtual conference, organised by Eurelectric.
Remaining cautious about the pace of recovery, the SSE head warned that a prolonged recession may keep energy demand and wholesale power prices subdued. Though lockdowns are gradually lifted in the UK, he still expects the country’s electricity demand to stay 8-10% lower than in 2019 this summer, and 3.5% lower in winter 2020/21, largely due to coronavirus containment measures.
Demand for electricity, gas and fuels is being help back as many employees would continue working from home instead of returning to the office, he suggested.
Call for “onshore supergrid”
SSE has urged the UK government to issue permits for some 75 gigawatts (GW) of offshore wind farms by 2050, a significant rise from the current 8.5 GW, and the development of an “onshore supergrid” to help speed up the electrification of the British industry.
Greater grid interconnectivity across Britain and the EU is vital for the green energy transition, and utilities across Europe are urging national government to take action now and invest in infrastructure.
Electrification is a “critical facilitator” for the continent’s economic recovery, Phillips-Davies said, stressing “it is essential to invest in tackling the barriers that prevented an accelerated electrification of buildings, transport and industries, during the first quarter of 2020.”
In this context, SSE also reiterated its call for more government support for electric vehicles and a gradual rise in the UK carbon tax. So far, only 17% of the one million public electric vehicle charging stations needed by 2025 have been built, as several projects were pushed back or cancelled this year.