Agenda
Challenges
The UK is facing the task of reducing its use of non-renewable energy resources whilst also maintaining security of supply. However, current trends suggest this will be a difficult undertaking as the UK currently derives 45% of its power generation from coal and nuclear energy. Furthermore, its gas use amounts to 100 billion cubic meters per year and is projected to increase by two percent every year until 2015.
Political
The UK is one of the major producers among IEA member countries, and was until recently, one of the only four IEA net exporting countries. However, UK’s North Sea oil and gas production has been declining since its peak in 1999. In 2004, the country became net importer of natural gas, and in 2006 it also became a net importer of oil.
UK oil reserves fell progressively from 5.0 Gb in 2000 to 2.8 Gb in 2010. Internal consumption over 2010 was 0.58 Gb, 18% above UK production, making the country more dependent on imports.
Status
Growth
The UK currently derives 45% of its power generation from coal and nuclear energy. Furthermore, its gas use amounts to 100 billion cubic meters per year and is projected to increase by two percent every year until 2015. The government has approved the construction of ten new nuclear plants and it has been estimated that up to 46 nuclear power stations will needed over the next 40 years to meet projected demand. The government also accepts that there will be a significant increase in gas use.
Targets
The British government has expressed an aspiration to derive far less energy from non-renewable energy sources for environmental as well as security reasons.
However, given that the country currently generates over 90% of its electricity from coal, oil, gas and nuclear energy it is perhaps not surprising that governmental rhetoric has shifted from the goal of utilising renewable energy to that of promoting “low-carbon technology.” New nuclear power plants and so-called “Clean Coal Technology” are both now firmly back on the British political agenda.
Institutional Structure
The Department of Energy and Climate Change (DECC)
DECC is the governmental department responsible for formulating and implementing the UK’s energy policy. It was only created in October 2008, as energy policy was previously the responsibility of the Department for Business, Innovation and skills.
The Energy and Climate Change Committee (ECCC)
This is the parliamentary committee responsible for examining the policies, expenditure and administration of the DECC. The Committee is part of and reports to the House of Commons.
The Office for Gas and Electricity Markets (Ofgem)
Ofgem is the industry regulator for gas and electricity markets in the UK. Its first priority is ensuring affordability for consumers which it tries to achieve through promoting competition wherever possible and regulating companies in the energy sector.
Budget
Current
Given the extent to which the UK’s energy markets have been privatised, the majority of funding for developments in the area of energy comes from the private sector itself. However, in 2009 the government has assigned funds in the area of energy, with the aim of contributing towards the expansion of low-carbon energy as well as enhancing energy efficiency. £60 million of this, and of those £1.4 billion to support low-carbon energy, will be invested to support research into Carbon Capture and Storage Technology (CCST), the development of which is crucial to so-called “Clean Coal.”
Key Policies
Investment in Internal Recource
Numerous policies are in place to try and maximise the UK’s own internal energy resource recovery. The Government is therefore actively engaged with actors in the energy industry to try and maximise what is left of the UK’s internal energy resources.
For example, the “Carbon Reduction Commitment Energy Efficiency Scheme” was setup to place a cap on the emissions of participating organisations who must buy allowances equal to their annual emissions, in CO2 equivalent, and within the overall limit on emissions the organisation can determine the best way to reduce these
Furthermore, the “Low Carbon Industrial Strategy (LCIS)” became effective in 2009 and aims to ensure that British businesses and workers are equipped to maximise the opportunities and limit the costs of transitioning to a low-carbon economy. It includes specific support for certain low-carbon sectors, including low-carbon energy sources.
Low Carbon Transition Plan
The UK Low Carbon Transition Plan is a white paper outlining how the British economy will be transformed to ensure the UK meets its emission reduction targets, secures its energy supplies for the future, maximises the economic opportunities for jobs, skills and investment as well as ensuring policies are fair to protect the most vulnerable in society.
It sets out the Government's long-term strategy to radically cut the nation's carbon emissions by 2020 - 18% from 2008 levels (over 1/3 from 1990 levels) and meet its first three carbon budgets. Under the 2008 Climate Change Act, the UK must meet legally binding carbon budgets, committing the UK to cuts its emissions by 34% by 2020 and 80% by 2050.
The key steps set out in the Plan cover five sectors: power and heavy industry; transport; homes and communities, workplaces and jobs; farming, land and waste.
Transition to Globalisation
Nuclear Energy
The majority of the UK’s currently active nuclear power plants will be decommissioned by 2027. The government had previously envisioned nuclear power being replaced by renewable energy.
However, it has since backtracked on this and in 2008 the government minister responsible for energy, John Hutton, commented that nuclear power “could be contributing a significantly higher proportion of the UK’s energy in the decades ahead.” This was subsequently confirmed as government policy in a 2008 White Paper on energy.
Globalisation > Economy > Energy > Sources > Non-Renewable > Nuclear
Transition to Political Tools
Gas Imports
The UK currently imports 25% of its gas, with the majority of that coming from Norway. However, given that the UK’s use of gas is predicted to increase significantly in the short-term it is highly likely that the country will need to import far more gas from Russia than it currently does.
Political Tools > National > Russia
Transition to Political Actors
UK’s Energy Research Centre
The UK’s Energy Research Council describes itself in the following way:
“The UK Energy Research Centre is the focal point for UK research on sustainable energy. It takes an independent, whole-systems approach, drawing on engineering, economics and the physical, environmental and social sciences.
The Centre’s role is to promote cohesion within the overall UK energy research effort. It acts as a bridge between the UK energy research community and the wider world, including business, policymakers and the international energy research community, and is the centrepiece of the Research Councils’ Energy Programme.”
Political Actors > NGOs > Energy > UK Energy Research Council
