What will working from home mean for electricity traders?
‘We could have half the people in the office and half at home, and you still have to heat or cool the office as if it’s full,’ one trader says
London — As millions of people across Europe are pondering when and how they will return to offices in the post-pandemic world, the region’s power traders are trying to figure out what a continuation of working at home will mean for their markets.
Power traders already have a tough job juggling thousands of data points that determine electricity prices — from which power plants will be generating to the expected energy usage during every hour of the day. Correctly predicting the effect on demand from new and more flexible work-from-home policies will be crucial.
“That will be interesting to see because we could have half the people in the office and half at home,” said Simon Rathjen, founder and director of intraday power markets at MFT Energy in Aarhus, Denmark. “And you still have to heat or cool the office as if it’s full.”
So far, new working policies that have come out of the region’s blue chips vary widely. UK insurer Aviva found that 95% of its staff would choose either full-time remote work or a flexible home-office split once lockdowns end. BP said that about 25,000 full-time office-based staff would work 40% of their time from home. Goldman Sachs, on the other hand, has said it was pushing for a full return.
While overall demand could well return to normal once the pandemic ends and economic activity picks up, the major difference could be in the exact time during the day when most power is consumed.
“You will still see the peak when people are starting their days and when they are doing the cooking, but it’s more about exactly when it will happen,” Andreas Schwarz Knudsen, Danske Commodities’ head of commercial business development. “Your evening peak may start earlier in London for example,” because people are not travelling long distances to get home.”
And in the British capital, Nenad Brdarski, MD at digital innovation agency Boxhain, is embracing the new world order and all the increased flexibility it entails. He says he will mix more freely between his home and the office in the future.
“It no longer feels unprofessional to have a nonoffice background in video calls with clients,” he said from his home in London’s Tufnell Park area.
For Schwarz Knudsen, that flexibility adds yet another layer of data and number crunching by the traders, analysts and their computer models.
“Now you need the data points for millions of citizens that are working from home,” he said. “That requires more sophisticated forecasting tools, and a more complex forecasting process.”
Bloomberg