The state of the energy sector in the UK

In the current essay, the situation of the UK’s energy industry was thoroughly covered. The availability of energy supplies, energy consumption, and the effect on the environment were the key concerns taken into account. The concluding sections of the current essay provided possible answers. Dependency on coal and other fossil fuels as well as reliance on imported energy were cited as the main causes of the UK’s chronic energy crisis. According to statistics provided by the UK government, the reliance on imported energy climbed dramatically in 2016 and reached a height that was last seen in the 1970s. The UK was obliged by the EU’s Large Combustion Plant Directive (LCPD) to shut down the coal plants. The plants contributed 22 percent of the total energy to the national grid. It was estimated that the closure would withdraw 12 GW from the national grid (Hope 2013). The continued dependence on nuclear energy had also exposed the energy sector to uncertainties given the fact most of the high capacity nuclear plants had exhausted their operational lifespan. A detailed breakdown of UK’s energy mix was presented in the literature review section.

Literature Review

In 2016, the UK was ranked number 19 globally based on fossil fuel production capacity – 1,062,000 barrels of oil were produced per day (US Energy Information Administration 2016). Data from the Department of Business indicated that the UK energy sector recorded a 1.2 percent increase in the energy production. The increase was attributed to a higher production capacity in nuclear, bioenergy, gas, and oil that was fueled by increased demands in the transport industry. In particular, natural gas, nuclear and coal accounted for 42.4, 21.2, and 9.1 percent. Renewable sources of energy such as wind and bioenergy accounted for 24.4 percent of the total energy production (34.7 GW), which represented a 14 percent increase (Department for Energy and Climate Change (DECC) 2017) as illustrated in Figure 1. In brief, 45.6 percent of UK’s energy was derived from low carbon sources. The 2000-2016 trend in energy production was depicted in Figure 2; it was noted that energy production was declining. The energy trends in natural gas were illustrated in Figure 3 based on data from the EIA; the patterns indicated that local production accounted for 37 percent while 63 percent of the natural gas was imported from other countries (US Energy Information Administration 2012).

One of the critical challenges facing the US energy sector was the decline in output from the North Sea oil fields. The decline in output had resulted in more dependence on natural gas and oil, which cumulatively accounted for more 50 percent of the UK energy mix (US Energy Information Administration 2012).

Leading nuclear plants in operation in the UK were constructed in the 1970s and 1980s. Given that the average operational lifespan of a nuclear power plant was 30 years, most of the plants in operation the UK would be shut down before 2025. For instance, the Oldbury plant was decommissioned in 2012. The decommissioning of the Oldbury plant was not the first. It was part of seven nuclear reactors shut down since 2000 (Hope 2013). The decommissioning of the reactors would cut off 14 GW from the national grid. The new challenges were expected to significantly impact on the capacity of the UK to be energy sufficient.

Energy Demand

The higher demand for energy in the UK was partly attributed to advanced energy needs in the domestic and commercial sectors. Energy consumption in commercial and residential buildings increased at a rate of 0.5 per year. The growth in building energy demands was attributed to the need for HVAC systems, population, and economic growth (Pérez-Lombard, Ortiz and Pout 2008). Additionally, power generation and public administration facilities contributed to the higher energy demand (Department of Business Energy and Industrial Strategy 2017, p. 94).

Recent plans by the UK to withdraw from the EU (Goodwin and Heath 2016, p. 323) were projected to adversely affect energy supply and demand given that EU member countries such as Norway supply natural gas to the UK. An investigation of the potential impact of Brexit on the upstream energy supplies indicated that the energy import bill would increase post-Brexit due to the devaluation of the British Pound (PricewaterhouseCoopers, 2016). In addition to the devaluation of the currency, Brexit would also adversely affect oil and gas exploration due to the new limitations in the migration of skilled personnel. Given the global nature of the oil and gas operations, barriers to labour mobility would undermine the long-term energy production in the UK (PricewaterhouseCoopers 2016). However, it was predicted that Brexit would ease the energy demand owing to the projected slowdown in the economy. Based on the energy price trends depicted in Figure 4, it was noted that the cost of electricity had remained relatively stable in between Q3 2014 to Q4 2016 while the cost of natural gas decreased marginally over the same period. Marginal inflation in the price of liquefied fuel was observed over the same period (Department for Business Energy and Industrial Strategy 2017).

Environmental Pollution

Notably, carbon dioxide emissions informed the government’s decision to cut back on coal dependence and adopt the integrated pollution control policy (OECD 2017, p. 2). Besides, the capital-intensive decommissioning of nuclear power plants, disposal of nuclear waste had made investments in atomic energy unattractive.

Renewable Energy Potential in the UK

The UK has a high potential for renewable energy from wind, tidal power, biomass and solar considering that the UK has one of the longest coastlines in Europe. Presently, the UK derives 260 MW of energy from tidal power at the Annapolis Royal tidal power and La Rance tidal barrages (Sustainable Development Commission 2007, p. 2). Notably, the La Rance barrage has been in operation since the 1960s, a clear testament to the sustainability of tidal power. Besides, plans were in progress to construct additional tidal power plants at Cardiff-Weston and the Shoots. It was estimated that the two power plants could produce 19.75 TWh of energy per year and 8.48 tons in CO2 savings per annum (Sustainable Development Commission 2007, p. 3). Similar findings were made by Soares and Meisen (2012, p. 28) who noted that tidal power in the UK was capable of producing up to 36 TWh annually – sufficient to meet at least one-third of national energy demand. The data depicted in Figure 5 below illustrated that the UK had the highest number of offshore wind energy farms under construction and the number of planned wind energy developments were only second to Germany’s. In 2011, the UK offshore wind farms in the UK produced 600 MW (Kaldellis and Zafirakis 2011, p. 1891).

Apart from tidal power, UK generated gas from landfill waste. Gas generated from such landfills was used to power industries and homes. Statistics from the department of environment indicated that the UK produced 7.7 million tons of landfill waste in 2015. However, 76.9 percent of the total energy generated was converted into power in 2014 (Department for Environment Food and Rural Affairs 2016, p. 1). The UK energy sector derived renewable energy from sewage sludge, domestic wood combustion.

Future Energy Prospects

Given the inadequacies of the current energy sources, the UK was positioned to benefit from the development of nuclear fusion technology. The development of nuclear energy was associated with significant risk to the environment, especially in the remediation of spent nuclear waste. Currently, the University of Oxford, Manchester and the Culham Center for Nuclear Fusion were at the forefront of nuclear fusion research in the UK (Oxford University 2017). The commercial use of fusion energy and thorium energy was impeded by the lack of technology and cost. Nonetheless, significant progress was noted after the establishment of the next generation magnetic confinement tokamak chamber (16 MW capacity) and the recent establishment of a thorium molten salt reactor. Nuclear research was aimed at optimising the reaction between deuterium and tritium (Equation 1) to attain the Lawson requirement (Equation 2). The symbols k, T, n, and τ, represented the Boltzmann constant, temperature, number density, and confinement time (Hoffert et al. 2002, p. 985). However, no fusion reactor had attained the ideal Lawson criteria.

In 2017, notable progress in the realisation of commercial fusion energy was recorded by Tokamak Energy. In particular, the company switched on its latest ST40 fusion reactor – the world’s only controlled fusion reactor. Reports from the company indicate that it was able to attain the first plasma phase. Based on the recent achievement, the company forecasted that it would connect fusion energy to the national grid by 2030 (Tokamak Energy 2017).

Conclusion

A review of the status of the energy sector established that the UK was faced with numerous challenges such as lower production attributed to the gradual phase-out of coal energy and the decommissioning of old nuclear reactors. Besides, production of oil in the North Sea oil fields had declined over time. Given the lower national energy output, the UK relied on natural gas imports from Norway and crude oil from Russia and other countries within the EU. Other key challenges that faced the UK energy sector included the devaluation of the GBP due to the fiscal uncertainties occasioned by the Brexit referendum. Despite these challenges, it was noted that the share of renewable energy in the UK was on the rise. The rise was attributed to the widespread use of natural gas whose share had increased from 29.5 to 42.4 percent. The UK was also investing in the next generational nuclear fusion energy through Tokamak Energy and the Culham Fusion Energy Facility. In light of the dynamics in the UK energy sector, it was proposed that more investments in renewable energy were needed to sustain future energy demands.

References

Department of Business Energy and Industrial Strategy (2017) UK Energy Statistics, 2016 & Q4 2016, pp 1-16.

Department of Energy and Climate Change (DECC) (2017) Statistical Press Release – SMEs, pp. 1-15.

Department for Environment Food and Rural Affairs (2016) UK Statistics on Waste, pp. 1-24

Department of Business Energy and Industrial Strategy (2017) Digest of UK Energy Statistics, pp. 1-264

Goodwin, M. J. and Heath, O. (2016) ‘The 2016 Referendum, Brexit and the Left Behind: An Aggregate-level Analysis of the Result’, Political Quarterly, vol. 87, no. 3, pp. 323–332.

Hoffert, M. I. Caldeira, K. Benford, G. Criswell, D. R. Green, C. Herzog, H. Jain, A. K.

Kheshgi, H. S. Lackner, K. S. Lewis, J. S. Lightfoot, H. D. Manheimer, W. Mankins, J. C. Mauel, M. E. Perkins, L. J. Schlesinger, M. E. Volk, T. Wigley, T. M. L.. (2002) ‘Advanced Technology Paths to Global Climate Stability: Energy for a Greenhouse Planet’, Science, vol. 298, no. 5595, pp. 981–987.

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Kaldellis, J. K. and Zafirakis, D. (2011) ‘The wind energy (r)evolution: A short review of a long history’, Renewable Energy, vol. 36, no. 7, pp. 1887–1901.

OECD (2017) the United Kingdom, pp. 1-9. Oxford University (2017) Oxford Energy [Online]. Available at: https://www.energy.ox.ac.uk/wordpress/nuclear/ [Accessed: 27/11/2017].

Pérez-Lombard, L., Ortiz, J. and Pout, C. (2008) ‘A review on buildings energy consumption information’, Energy and Buildings, vol. 40, no. 3, pp. 394–398.

PricewaterhouseCoopers (2016) ‘Brexit Monitor: The impact on the energy sector’, Brexit Monitor, (9), pp. 1–8.

Soares, T. and Meisen, P. (2012) Is 100 % Renewable Energy Possible for the UK by 2020 ? pp. 1-54.

Sustainable Development Commission (2007) Tidal Power in the UK Research Report 3 – Review of Severn Barrage Proposals, pp. 1-251

Tokamak Energy (2017) Limitless, clean energy from nuclear fusion will be a reality in the UK by 2030 [Online]. Available at: https://www.tokamakenergy.co.uk/limitless-clean-energy-from-nuclear-fusion-will-be-a-reality-in-the-uk-by-2030/ [Accessed: 27/11/2017].

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