Covid-19’s Impact on European Power Sectors: An Econometric Analysis

Philipp Hauser, David Schönheit, Hendrik Scharf, Carl-Philipp Anke and Dominik Möst
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Philipp Hauser: Chair of Energy Economics, Technische Universität Dresden, Münchner Platz 3, 01069 Dresden, Germany
David Schönheit: Chair of Energy Economics, Technische Universität Dresden, Münchner Platz 3, 01069 Dresden, Germany
Hendrik Scharf: Chair of Energy Economics, Technische Universität Dresden, Münchner Platz 3, 01069 Dresden, Germany
Carl-Philipp Anke: Chair of Energy Economics, Technische Universität Dresden, Münchner Platz 3, 01069 Dresden, Germany
Dominik Möst: Chair of Energy Economics, Technische Universität Dresden, Münchner Platz 3, 01069 Dresden, Germany

Energies, 2021, vol. 14, issue 6, 1-17

Abstract: Covid-19 affects the personal lives of millions and led to an economic crisis. Changed behavioral patterns and a reduction of industrial activity result in a reduction in power demand, and thus Covid-19 impacts the power systems around the world. Bottom-up mapping of the effect of Covid-19 on the energy demand is challenging, if not impossible. In order to analyze the impact of the pandemic on power demand, we instead propose a simplified approach based on an econometric analysis that quantifies the country-wide load reduction of Covid-19, using the number of active cases as well as the specific lockdown period as proxies. The time span covered is from 1 January 2016 to 31 August 2020. This long time span allows us to investigate the effect of Covid-19 on the power demand. We find that in Germany (DE) and Great Britain (GB) the power demand is reduced by about 1–1.7 MW per case, while in France the demand increased by 1 MW per case during times outside of the lockdown. On the other hand, in France the lockdown itself has a much higher load reduction effect in France than in GB and DE. Based on the elasticity of power demand regarding Covid-19 cases, we calculate the impact of Covid-19 on the power prices through reduced loads. We find that Covid-19 reduced power prices by 3 to 6 EUR per MWh. The effect of Covid-19 on carbon emissions in the power sector is likely to be small. In Germany, the country with the highest absolute level, emissions in the power sector were reduced by approximately 2% (4 Mio. t CO 2 ).

Keywords: Covid-19; power system; carbon emissions; Europe; regression analysis (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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