Introduction
2022 has been a turbulent year for energy. According to a report by IEA, in the first half of 2022 gas prices in Europe increased fourfold and coal more than threefold from the same period in 2021. This resulted in wholesale electricity prices more than tripling in many markets, including the UK electricity market which sources its electricity supply from large coal and gas power stations. The following blog will detail the electricity consumption statistics for the first two quarters of 2022, breaking it down by sector. We will also detail a predicted forecast of the electricity market in 2023.
2022 Electricity Consumption Statistics
The electricity consumption data below is from a report looking at UK April to June 2022 energy consumption, provided by the Department for Business, Energy and Industrial Strategy.
Domestic Electricity Consumption
The consumption of electricity from the domestic sector decreased substantially in Quarter 2 of 2022, decreased from 15.8 per cent to 21.7 TWh, the lowest value since Quarter 3 in 2019. This decrease reflects the ease of COVID-19 restrictions in place during the same months in 2021, which meant that people spent less time at home and were comparatively using less electricity. 2022 also saw warmer temperatures in April and May, which reduced the electricity demand for heating. This decrease in 2022 may also reflect customers’ efforts to reduce consumption because of the soaring electricity prices.
Non-Domestic Electricity Consumption
Both non-domestic sectors saw a slight increase in consumption levels in Quarter 2 2022 compared to the same period in 2021. The lifting of COVID-19 restrictions meant that businesses and industries could return to normal operations during this period, however the increase in demand was partially offset by the warmer than average temperatures.
The industrial sector consumed 0.8 percent more electricity compared to Quarter 2 2021 and comparably, the consumption by the other final users, including the commercial sector, increased by 0.6 per cent in Quarter 2 2022 compared to the same 2021 period.
Total Electricity Consumption
The total consumption seen by Quarter 2 of 2022 increased by 8.2 percent compared to the same period in 2021, in contrast to a 5.5 percent decrease in total demand. This resulted from the UK becoming a net exporter of electricity in Quarter 2, with net exports of 4.0 TWh.
What does all this mean?
In 2022, the UK saw rising costs of energy combined with warmer-than-average temperatures, resulting in a decrease in domestic energy consumption. On the other hand, the UK saw business re-open fully after COVID-19 in 2022, which alongside the UK becoming a net exporter of electricity, resulted in an increase of total energy consumption.
This overall increase in consumption is one reason why regions across the UK have been warned about potential blackouts or power cuts in the 2022/23 winter season, as the National Grid may struggle to meet energy demands.
Electricity Market Forecast for 2023
With the ongoing conflict with Russia and Ukraine, Europe is preparing to reduce its reliance on Russian fossil fuel imports by hastening its clean energy transition heading into the new year. The continued energy price crisis is fuelling debate on wholesale electricity market design, while governments are trying to cushion high electricity prices with diverse support schemes.
The Economist Intelligence Unit or EIU have predicted in their Energy Outlook 2023 report that global energy consumption will increase by only 1.3% in 2023 amid a slowing economy. Despite decarbonisation targets, coal consumption could grow marginally to compensate for gaps in gas supplies, and more extreme weather events could force many countries to fall back on fossil fuels, delaying the energy transition.
However, EIU also predicted that renewable energy consumption will surge by about 11% and the energy crisis will prompt some governments to backtrack on efforts to phase out the use of nuclear power.
There are large uncertainties about electricity in 2023. The International Energy Agency’s report detail that the main uncertainties affecting this forecast for electricity demand are primarily related to fossil fuel prices and potential economic growth. As of mid-2022, the global electricity demand growth in 2023 is expected to remain on a similar direction as this year. Strong renewable energy growth of 8% and recovering nuclear generation could also displace some gas and coal power, resulting in the electricity sector’s CO2 emissions declining by around 1%.
Conclusion
With the National Grid’s warning about potential power cuts this winter, many homes and businesses are worried about losing power, as well as the financial impact of rising gas and electricity prices heading into the new year. The recent cold snap this month has already started to test the UK’s efforts to prevent winter power cuts, and many are looking for ways to cut energy costs. The National Grid are providing an Off Peak Energy rebate Scheme from November to March to help prevent power outages and ensure energy sustainability while helping homes and businesses save money.
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To ensure your business operations remain unaffected by electrical outages, get in touch with the UK’s leading technical experts today for peace-of-mind through even the chilliest months ahead.