COVID’s inverse duck effect

We are now a whole month into lockdown across Australia due to COVID-19 and in a better position to take a look at the impacts of COVID19 on the National Electricity Market (NEM).
In our Chart of the Week Issue 29 two weeks ago, we looked at the demand curve across March and into the first week of April, which showed a trend emerging of a decline morning peak and an unchanged evening peak.

Two weeks on we can see that the decrease in morning peak demand has persisted for the whole of April, while the 6pm peak has remained constant. Across main city loads (Brisbane, Sydney and Melbourne) the average mean temperature for April in 2020 was lower than in 2019 for Sydney and Victoria (-0.5C, and -2.7C, respectively), however Brisbane was over 1.7C hotter this year meaning that we would expect the weather effect on demand to be a small overall decrease for April 2020.

Instead what we see is:

  •  a sharp decline in peak morning demand from COVID-19 led by NSW (and to a lesser extent VIC and QLD)
  • a slight increase in middle of the day demand led by NSW and QLD (VIC has mostly seen a decrease in midday/afternoon demand due to milder weather). However, given we would have expected this to decline due to business closures shows that residential usage is likely to be significantly up. It may also show that office buildings have not been properly or fully shut down
  • small trough from 3-5pm mainly from NSW and VIC
  • the evening peak has remained ~6pm with people still apparently stopping work at normal finishing hours


Perhaps, more interesting is the resulting change in generation mix as a result of the softening and peakier demand curve for April 2020. This resulted in renewables displacing coal mostly from increased wind (from Victoria), rooftop solar (from NSW mostly, but also QLD and VIC) and utility solar (mostly from QLD). Hydro displaced coal over the evening peak through to just before the morning peak, which is surprising given the marginal cost for hydro is higher than coal. The increased hydro was driven mostly by increased Tasmanian generation, which given the decline in hydro in the generation mix for Victoria over this period means that interconnection between TAS to VIC and then VIC to NSW would have been running at high capacity during these periods pushing prices down.

We will talk more about these issues in the coming weeks at our next COVID-19 webinar in May; register here. Feel free to reach out to us at to get access to our April COVID-19 impacts assessment.