The coronavirus pandemic has led to a sell-off in wholesale US electricity markets as closed restaurants and office buildings, and idled factories, lead to lower power use. The price decline is a real-time indicator of an economy believed to be hurtling towards recession, with more than 100m people staying at home to avoid contagion. It is likely to hurt the profits of American power producers and could tilt the balance of US energy use away from fossil fuels and towards wind and solar sources.
Power futures have dropped between 22 per cent and 37 per cent since mid February across most trading hubs, according to data from Nodal Exchange. The hardest-hit market is New York state, the centre of the US outbreak. The state’s grid operator on Thursday said daily energy use had fallen nearly 8 per cent from late March, even adjusting for the effects of weather. In New York City, demand has been between 2 per cent and 18 per cent below normal depending on the time of day.
Commercial and industrial businesses are using less power. An increase in residential demand, as people hunker down at home with their computers and televisions, is not enough to offset the effects of lower business use, the US Energy Information Administration (EIA) said this week. New York and California are experiencing the most dramatic hits to demand in North America