What has the energy crisis taught us about electricity demand?
Milder temperatures, price increases, savings policies. Electricity demand in 2022 fell by 3%
Following Russia’s invasion of Ukraine, the world entered its first energy crisis. Rising prices and disruption of energy trade flows have led to a decrease in electricity demand in Europe.
But what are the factors that have concretely influenced the demand for electricity?
The new analysis of the IEA highlights at least 5, from milder temperatures to energy saving policies.
Electricity demand: the causes of the decrease
The European Union was the only territory in which demand for electricity decreased significantly during 2022.
The IEA study shows, in fact, a decrease in demand of 3%. An exceptional figure, which was recorded only in 2009, in the wake of the global financial crisis, and in 2020 when the pandemic had brought the economy to a standstill.
There are a number of factors that played a major role in the fall in electricity consumption last year. The Agency shall highlight at least 5:
- Milder temperatures
- Price increase
- Change in the behaviour of individuals
- Energy saving policies
- Improvement of energy efficiency
Certainly the milder winter and warmer summer has reduced the demand for electricity, but it is not the factor that has contributed most importantly.
The increase in electricity prices is the biggest cause. Prices increased from around 180 euro per MWh to over 400 euro per MWh in August 2022.
Electricity demand: the role of savings policies
In addition to the increase in electricity costs, two other factors that have affected the decline in demand are behavioural changes in consumption, especially in the residential and service sectors, and the energy savings wanted by the States themselves who have implemented policies to contain consumption.
In addition, the improvement of the energy efficiency of buildings, especially residential buildings, has allowed significant savings in the use of electricity, reducing the demand.
The Agency’s study therefore highlights a series of interrelated causes that could continue in the long term, with a view to greater savings and a substantial improvement in energy sources.
It should be noted, however, that the decrease in demand has occurred exclusively in the EU, worldwide it has grown by 2%.