German power demand seen down 4-5 per cent, gas 6-10 per cent in 2020
Electricity demand in Germany, Europe's leading power market, could fall by 4 per cent-5 per cent year-on-year in 2020 and natural gas use by 6 per cent-10 per cent as the coronavirus crisis saps demand, the Team Consult advisory said.
Power demand has already decreased by 4 per cent so far this year compared with the same period in 2019, Team Consult said in a research note published late on Tuesday, while gas use contracted 6 per cent.
In a bullish scenario, usage of both fuels would normalise by mid-year, but in the event of disruption from a second wave of the novel coronavirus, the lower end of the target range would apply, the consultancy said.
The Berlin government imposed movement restrictions in March and April to curb the spread of the virus, prompting factories to shut and grounding workers at home.
The government's growth forecast last week for 2020 was for a 6.3 per cent fall in gross domestic product, marking the deepest recession in post-war history.
The containment measures are being relaxed gradually, with social distancing rules remaining in place up to May 10.
But energy usage declines in areas, such as automotive and metals have been heavy and continue, even as some industrial activity resumes.
The virus spread has therefore resulted in sharp falls in European wholesale power prices, where German forward levels serve as benchmarks.
Month-ahead German power prices had lost 24.5 per cent year-on-year on Monday and those of gas 18.9 per cent over the average of trading days in the year-to-date, Team Consult said.
Europe's biggest electricity market, Germany consumed 511 terawatt hours (TWh) in 2019. It is the second biggest gas market after Britain, accounting for 982 TWh of gas use last year, industry figures show.