Effects of Economic Shocks on Power Systems: COVID-19 as a Case Study

A central issue that was recently discussed within the power systems community is how the COVID-19 pandemic, and possibly other future pandemics, will affect the integration of renewable energy sources in the long-term. An interesting idea that may shed light on this question is the one of 'economic shocks', according to which, if the integration of renewable sources can be described as a dynamic system operating on time-scales of years, then several months of low consumption may be viewed as a negative impulse signal (a shock), which causes reactions and counter-reactions that evolve in a closed feedback loop. In this paper we explore this idea by means of a regression model, which attempts to reflect the relations between fossil-fuel based generation and day-ahead electricity prices and demand in the European market. The results point out to an interesting phenomenon of instability in fossil-fuel based generation following a shock in consumption, which may support the claim that pandemics and other economic shocks may promote the future integration of renewable energy sources.