For the first in a series of updates from Innowatts Europe, we sat down with Dave Boundy, our CTO and General Manager Europe, to get his take on the implications of COVID-19 on Utilities and Energy Retailers in Europe.
What has been the impact of COVID-19 in Europe?
It’s been a negative demand shock, the likes of which the industry has never seen before. Utilities, network operators and retailers here in Europe are used to dealing with supply shock, where a sudden reduction in the availability of energy results, for example, due to unplanned maintenance in a power plant, an extreme weather event, etc. These are crisis in their own right, yet the industry is ‘used’ to them and is equipped to respond.
The impact of country-wide lockdowns due to COVID-19, coming into force overnight are something the industry has never experienced before.
We saw a large reduction in total energy demand right across Europe. Some of the latest data from Entso-E shows that demand in Italy dropped 28% since the beginning of April, compared with last year. France is down 26%, Spain dropped 25%.[i]
So how has residential demand been impacted?
Residential demand is up, simply because everyone is at home due to the lockdown. They all have to work, study, eat and amuse themselves, so more energy is being consumed. Especially in the middle of the day when traditionally a large percentage of the population would have been at school or at work.
Additionally, the load shape has changed. The typical duck curve profile, where we see a peak in the morning, dropping during the day with a second peak in the evening, has changed to a more steady-state demand throughout the day. The duck curve is flattening.
We are still seeing morning and evening peaks, but with changed timing and elongation. This reflects changes in behaviour i.e. families getting up later as kids do not need to get to school and many workers are not commuting.
The net-net result is that the peaks of the traditional duck curve are flattening with overall residential demand up around 6%.
What have you seen in commercial and industrial?
In the commercial and industrial sector, it is a very different story. We are seeing an average >30% reduction in demand, with significant variance by industry type. The restaurant sector, is down around 60+%, excluding pizza and delivery services. Interestingly, the hotel sector is having a much smaller drop off compared to the average. This can be attributed to the fact that many hotels are being used for alternative purposes, such as housing of healthcare and other essential workers, as emergency homeless accommodation, quarantine centres, and the like.
Other industrial sectors are down by as much as 80%. At the same, there are pockets of industrial activity where consumption has gone up, with many facilities running 24/7 producing for example badly needed medical supplies.
So where does Innowatts fit in to all this?
Innowatts is a world leading provider of AMI-enabled predictive analytics and AI-based solutions. Our approach uses AI applied to customer level data to understand and predict changes in behaviour and the resulting energy consumption patterns.
Our CEO, pointed out in a recent VentureBeat article (LINK), Innowatts US customers, who avail of our AI forecasting capabilities, realized a 10-20% improvement in their forecasts as compared to traditional standardised forecasting methods.
Enabling them to plan for and procure energy more efficiently delivering savings directly to their bottom line.
What has been the impact of all this on Innowatts the company?
As this crisis developed, the first thing that was of concern was our people. In advance of the lockdowns, we advised staff to work from home and take other precautions. Thankfully, we can report that none of our worldwide team has been directly impacted.
Not only did this keep our team safe but helped ensure we could continue to seamlessly deliver services to our customers throughout the crisis.
Innowatts was born in the cloud. This has been a great advantage in our transition to 100% remote working. We have had to adapt, especially when it comes to hiring. We are interviewing candidates 100% remotely and getting new hires started without the opportunity to meet them in person.
Some of our team have had to adjust their working hours to look after their children, but little else has changed, we continue to deliver new products and onboard new customers.