The energy industry in the UK has historically predominately been around the production and use of coal to generate electricity with support from nuclear of course. However, there is a rise in the growing 'renewables' segment particularly around wind and solar, but the revenues generated by these new sub-sectors are limited and have reduced the contribution to UK GDP to energy industries and the levels of employment across the sector.
In 1990 the energy production by fuel type for the UK was 72% coal, 20% nuclear and the remaining 7% Oil & Gas and the remaining 1% renewables. This quickly changed during the 1990's and by the year 2000 the energy mix of the UK was much different at 32% coal, 22% nuclear, 43% oil & gas and the remaining 3% from renewables. The mix stayed pretty steady for the next decade or so with the energy mix of the UK in 2017 being a much different 7% coal, 21% nuclear, 43% oil & gas with renewables providing the remaining 29%.
Oil and Gas has been and is likely to be for a while to come the primary energy source for the United Kingdom and much of the world. Although, its use decreased in the 1980's during the energy crisis, it went from being 5% of the UK GDP in the 1980's to 2% in 1990. Since this time Oil and Gas inland energy consumption has increased from 60% to 67% conversely Coal has reduced from 31% in 1980 to just 4% in 2018.
In summary, the nuclear industry and oil & gas have remained pretty consistant in energy production since the turn of the millenium with a decline in coal being offset by the increase in renewable energy.
Below you will find statistics on coal, nuclear, and various other energy sources and fuels useful when looking at the overall consumption rates, industry revenues , and where the industry hopes to be in the next decade.
The Energy Industries Contribution to the UK Economy in 2018
#1 Energy Industries contributed 3.2% of GDP.
#2 Generated 9.7% of total investment.
#3 Generated 32.6% of industrial investment.
#4 1.6% of annual business expenditure on research and development in 2017.
#5 179,000 people directly employed (6.2% of industrial employment) and more indirectly (e.g. an estimated 126,700 in support of UK Continental Shelf production).
#6 Primary energy production rose in 2018, up 2.9 per cent on a year earlier. The rise was driven by growth in output from primary oil, wind, solar and biomass. Overall fossil fuel growth increased, but with coal output falling to a record low level.
#7 Final energy consumption rose by 1.1 per cent, as demand for heating increased during the ‘Beast from the East’ weather storm in February and March. On a temperature adjusted basis, final energy consumption rose by 0.2 per cent.
#8 Total renewables, as measured by the 2009 EU Renewables Directive, accounted for 11.0 per cent of total energy consumption in 2018, up from 9.9 per cent in 2017.
#9 Electricity generated from renewable sources in the UK in 2018 reached a record 33.0 per cent of total UK electricity generation, 3.8 percentage points higher than the previous year, also a record. This increase reflected a 10 per cent rise in renewable generation capacity to 44.3 GW.
#10 Low carbon electricity’s share of generation increased from 50.0 per cent to a record 52.6 per cent, driven by the increase in renewables generation.
The contribution to the UK economy by the energy industries peaked in 1982 at 10.4%. Despite its significant fall in 1986, oil and gas extraction has been the major energy contributor to the UK economy (with its value dependent both on production and the price of oil and gas). However, in 2015 and 2016 oil production increased, but the large fall in oil prices led to the contribution from the oil and gas sector falling below that of the electricity sector. In 2017, oil production fell marginally but despite the large increase in oil prices, the oil and gas sector remained the second largest contributor. For 2018, the contribution by the energy industries to the UK economy was 3.2% of GDP (0.3 percentage point higher than in the previous year). Of the energy total in 2018 oil and gas extraction accounted for 34% (up 4.2 percentage points on the previous year), electricity (including renewables) accounted for 37% (down 4.4 percentage points) and gas accounted for 18% (up 0.8 percentage point). (BEIS)
Inland energy consumption, 1990 and 2018
#11 Primary energy consumption was broadly similar in 2018 compared to 2017.
#12 The average temperature in 2018 was also broadly similar to 2017, though the months of February and March were colder due to the ‘Beast from the East’ weather storm.
#13 On a temperature corrected basis, primary energy consumption was 1.1% lower than in 2017, continuing the general fall seen since 2005.
#14 In the last 30 years, consumption of natural gas and primary electricity has risen considerably, whilst consumption of oil and coal have fallen. However, over the past decade, consumption of bioenergy and waste has also grown.
Final energy consumption, 1990 to 2018
#15 Total final energy consumption (excluding non-energy use) was 1.1% higher in 2018 compared to 2017. It rose by 3.4% in the domestic sector, by 1.1% in the service sector, and by 0.3% in the industry sector, but fell by 0.1% in the transport sector.
#16 The rises in the domestic and service sectors were due to increased demand for heat reflecting the colder temperatures in February and March during the ‘Beast from the East’ weather storm. Overall final energy consumption, when adjusted for temperature, was up by 0.2%, in 2018.
#17 In terms of fuel types, final consumption of gas, the main fuel used for heating, rose by 4%. Oil use fell by 1%, whilst electricity consumption was broadly unchanged, however there was increased use of bioenergy in all sectors.
UK energy import dependency, 1970 to 2018
#18 In the 1970’s the UK was a net importer of energy. Following development of oil and gas production in the North Sea, the UK became a net exporter of energy in 1981. Output fell back in the late 1980’s following the Piper Alpha disaster, with the UK regaining a position as a net exporter in the mid 1990’s.
#19 North Sea production peaked in 1999, and the UK returned to being an energy importer in 2004. In 2013 imports of petroleum products exceeded exports following the closure of the Coryton refinery; the UK is now a net importer of all main fuel types although remains a net exporter of some products such as petrol and fuel oil.
#20 In 2018, 36% of energy used in the UK was imported, down sharply from the 2014 level due to increases in indigenous oil and gas output and, more recently, renewables.
#21 Latest comparable data from Eurostat, for 2016, show that the UK had the seventh lowest level of import dependency in the EU. All EU countries are now net importers of energy.
Proportion of UK energy supplied from low carbon sources, 2000 to 2018
#22 In 2018 the UK obtained 19% of its primary energy from low carbon sources, with 39% of this from nuclear power.
#23 The second largest component of low carbon in 2018 was bioenergy, accounting for 37% of the total low carbon energy sources.
#24 Energy supply from biofuels increased by 11% in 2018; with more use of anaerobic digestion, wood pellets and energy from waste.
#25 Solar was up by 12% in 2018 reflecting increased capacity. The supply of nuclear fell by 7% due to outages at Dungeness B and Hunterston B towards the end of 2018.
#26 Energy supply from wind increased by 15% in 2018, with capacity up by 11% but with wind speeds 0.1 knots lower than in 2017.
UK energy and carbon ratios, 1990 to 2018
#27 The energy ratio is calculated by dividing temperature corrected primary energy consumption by GDP at constant prices, with the carbon ratio similarly calculated by dividing carbon dioxide emissions by GDP. Both ratios have fallen steadily, with the energy ratio declining by around 2½% per year and the carbon ratio declining at a faster pace of just over 3½% per year.
#28 The downward trends of energy ratio and carbon ratio are due to a number of factors, with improvements in energy efficiency and the decline in the relative importance of energy intensive industries affecting both ratios. The carbon ratio has been improved further by the increased use of more carbon efficient fuels and renewables.
#29 The sharp downward ticks in the carbon ratio in both 2011 and 2014 are due, in the main, to temperatures, with energy consumption decreasing in response to the warmer weather. The reduction in 2018 is mainly down to fuel switching with less coal used for generation.
#30 Latest International Energy Agency data shows that the energy ratio is falling in all G8 countries. The UK is estimated to have the lowest energy ratio in the G8.
UK Greenhouse gas emissions by gas, 1990 to 2018
#31 In 2018 UK emissions were provisionally estimated to be 448.5 million tonnes of carbon dioxide equivalent. This is 2.5% lower than the 2017 figure of 460.2 million tonnes and 44% lower than the 1990 figure of 794.4 million tonnes.
#32 Carbon dioxide emissions, which are primarily created when fossil fuels are burned, were estimated to account for about 81% of total UK anthropogenic greenhouse gas emissions in 2018. Estimates based on energy production and consumption in 2018 indicate that carbon dioxide emissions were 2.4% lower than the previous year and 39% lower than in 1990.
#33 The decrease in emissions since 2017 can largely be attributed to a change in the fuel mix for electricity generation, with less use of coal and gas and increased use of renewables.
UK Coal production and imports, 1990 to 2018
#34 In 2018 UK coal production fell to an all-time low of 2.6 million tonnes, 15% lower than in 2017.
#35 Following closure of the last three deep mines in 2015 (Hatfield, Thoresby and Kellingley), UK coal production fell to a fraction of the previous values. At 25 thousand tonnes, deep mined coal comprises less than 1 per cent of total production.
#36 In 2018 surface mine production fell by 15% to a new record low of 2.6 million tonnes. This is as a result of mine closures and falling demand for coal for electricity generation.
#37 UK Coal imports started in 1970 and grew steadily. In 2001 imports exceeded the level of UK production for the first time. As annual levels of UK coal production continued to fall, imports continued to grow and in 2006 reached a new record of 50.5 million tonnes. Demand from electricity generators declined over the next five years and imports fell accordingly. However, in the three years from 2011, higher gas prices led to greater demand for coal from electricity generators and imports rose again up to 2013 when they stood at 50.6 million tonnes, just above the 2006 record.
#38 From 2014 to 2017 UK coal imports fell once more as coal-fired electricity generation shrank and in 2017 were at 8 million tonnes, a 34-year low. In 2018 imports, at 10 million tonnes, rose by 19 per cent compared to 2017.
Coal consumption, 1990 to 2018
#39 In 1990 coal generation was 84 million tonnes and fell steadily after 1991 until 1999. After rising to an 11 year high in 2006 (57 million tonnes), coal used by generators fell steadily between 2006 and 2009 before stabilising then increasing sharply in 2012 due to high gas prices, which allowed coal fired stations to generate electricity at a lower cost than some gas fired stations.
#40 Coal use in UK electricity generation has fallen since 2012, due to an overall decline in coal power station capacity.
#41 In 2018 coal use in UK electricity generation fell to a record low of 7 million tonnes. Demand for coal-fired electricity generation continued to decline as production favoured gas, partly due to the carbon price per GWh being higher for coal.
#42 Carbon price is a charge on those who emit CO2 for their emissions.
#43 The increase in nuclear and renewables production contributed to the decline of coal use for UK energy production. Additionally, generation capacity which had fallen in recent years continued to fall with Eggborough power station closing in September 2018.
UK petroleum demand by product, 1990 and 2018
#44 In the long term, demand for oil products has been in decline since 1990 and the mix of products consumed has changed dramatically.
#45 Transport now represents nearly 80% of energy demand, a substantially larger share than in 1990 because the use of fuel oil for electricity generation has declined and air travel has become more common.
#46 Although the total of diesel and petrol sales is similar to what it was in 1990, consumption has increased for diesel and decreased for petrol.
UK demand for road fuels, 1990 to 2018
#47 Since the early 1990s there has been a marked trend of increasing demand for diesel, which had more than doubled, and reducing demand for petrol, which had halved, by 2018. This was caused by the increased use of diesel-fuelled cars and Light Goods Vehicles (LGVs).
#48 In 2018 diesel demand fell for the first time in the series following increases to the tax rates charged for diesel vehicles after it was identified that diesel engines emit Nitrous Dioxide and Particulate Matter more heavily than their petrol equivalents.
#49 Diesel consumption fell to 11.2 million tonnes and petrol consumption fell to 11.6 million tonnes, meaning demand for road fuels was down by 1.3 per cent in 2018.
Electricity generated by fuel type, 2017 and 2018
#50 Total electricity generated decreased by 1.6% between 2017 and 2018.
#51 The share of electricity generated by the UK in 2018 from coal fell a further 1.6 percentage points from 6.7% to 5.1% in 2018, continuing a long-term downwards trend.
#52 The share of electricity generation from gas also fell in 2018 from 40.4% to 39.5% in 2017, whilst generation from nuclear decreased from 20.8% to 19.5% due to outages and ongoing maintenance. The decline in electricity supplied from fossil fuels was caused by increased generation from renewables, which increased its share of generation from 29.2% to a record 33.0%.
#53 Renewables’ generation increased in 2018 due to a 10.0% increase in capacity and higher average daily sun hours
UK electricity supplied by fuel type, 1990 to 2018
#54 The mix of fuels used to generate electricity continues to evolve. Since 1990 the decline of coal and the rise of gas and, in more recent years renewables, have been the most marked features, but none of these fuels have followed a smooth path.
#55 Coal recorded its highest level for ten years in 2006 as nuclear station availability was reduced and as a substitute for high priced gas. Coal use trended downwards until 2010 when higher winter electricity demand resulted in an increase from coal, then rose in 2012 due to high gas prices. Subsequently, supply from coal has fallen each year due to plant closures and conversions, continuing in 2018 to reach a new record low of 16.0 TWh.
#56 Between 1990 and 2008, supply from gas rose significantly from 0.4 TWh to a peak of 173 TWh in 2008. Subsequently, supply has fluctuated with a large increase in 2016, but decreases in 2017 and 2018. From 2017 to 2018, supply from gas has dropped by 3.8% to 129.1 TWh.
#57 Supply from nuclear grew to a peak in 1998 before falling back, particularly during 2006 to 2008, as station closures and maintenance outages reduced supply, but recovered in 2009 before falling in 2010 due to further outages. Nuclear supply has fluctuated since 2010 with rises compared to the previous year in 2011, 2015 and 2016; although a decrease has been seen over the last two years. Nuclear supply has dropped 7.5% from 2017 to 2018, to 59.1 TWh.
#58 Supply from wind and solar has followed an upward trend since 2000 as generation capacity increased each year. In 2017, wind and solar supply increased significantly by 14.2% to reach 69.8 TWh. This was due to an increase in capacity of 11.2% in wind capacity and 2.6% in solar capacity, while there were 0.6 sun hours more per day in 2018 than 2017. Average sun hours per day in 2018 were at the highest level since 2003.
#59 Total electricity supplied rose continuously from 1997 to reach a peak in 2005. It has subsequently fallen, reflecting lower demand due to energy efficiency, economic and weather factors, with 2018 supply 13% lower than that in 2005.
UK renewable energy sources, 2018
#60 In 2017, bioenergy accounted for roughly two thirds of renewable energy sources used, with most of the remainder coming from wind (22%), solar (5.2%) and heat pumps / deep geothermal (4.4%).
#61 Of the 22.2 million tonnes of oil equivalent of primary energy use accounted for by renewables, 15.4 million tonnes was used to generate electricity, 5.4 million tonnes was used to generate heat, and 1.4 million tonnes was used for road transport. Renewable energy use grew by 12.1% between 2017 and 2018 and is now almost nine times the level it was at in 2000.
UK Electricity generation from renewable sources since 2000
#62 Electricity generated from renewable sources increased by 11 per cent between 2017 and 2018 to a record 110.0 TWh. Generation was buoyed by large increases in capacity for wind and bioenergy.
#63 Total wind generation increased by 15 per cent to 56.9 TWh; within this, offshore wind generation rose by 28%, to a record 26.7 TWh. Generation was aided by added capacity and increased despite a small decrease in average wind speeds. Average onshore wind speeds in 2018, at 8.5 knots, were 0.2 knots lower than in 2017.
#64 Hydro generation fell by 7% in 2018, in part due to a decrease in rainfall. Generation from solar PV increased by 11%, aided by a 2.6% increase in capacity and longer average sunlight hours (up 0.6 hours in 2018). Generation from plant biomass increased by 15%, partly due to new plants being converted from coal to biomass at Lynemouth and Drax.
#65 Renewable electricity accounted for a record 33.0% of electricity generated in the UK during 2018, 3.8 percentage points higher than 2017. The map on page 33 shows installed wind capacity for onshore and offshore sites across the UK.
UK progress against 2009 EU Renewable Energy Directive
#66 In March 2007, the European Council agreed to a common strategy for energy security and tackling climate change. It set a target of 20% of the EU's energy to come from renewable sources. In 2009 a new Renewable Energy Directive was implemented and resulted in agreement of country “shares” of this target. For the UK, by 2020, 15% of final energy consumption - calculated on a net calorific basis, and with an air transport fuel cap - should be accounted for by energy from renewable sources.
#67 In 2018 11.0% of final energy consumption was from renewable sources; this is up from 9.9% in 2017.
Energy Industry Trends Analysis
There is a push to focus more on renewable resources for energy production instead of maintaining our previous reliance on fossil fuels. New ideas, such as wave, tidal energy and work on modular reactors, work with the traditional options wind and solar to continue cutting into other market share that coal, oil & gas, or the current nuclear segments enjoy within the industry.
The sun provides us with enough energy in a day to fuel out power needs for an entire year if we can find ways to harvest this resource. Then our reliance on hydrocarbons, coal and other potentially dangerous items can be reduced (inc. the stuff that make the windmills and solar panels).
Look for the Internet of Things to play a significant role in the future of the energy industry. If you turn off just one refrigerator, then you have 100 watts of energy as a reserve. If you can capture energy from 1 million householder simultaneously, then there is a 100-megawatt asset at your disposal. As the efforts to digitise increase, look for physical asset replacement, energy cycling, and more renewables to become the trend prioritises in the next 5-10 years.
Below is a great TEDx talk from Michael Shellenberger on why renewables can't save the planet on there own.
Get Into Nuclear is changing the perceptions of the nuclear industry in the UK making the industry more attractive to the next generation and sector jumpers. We do this in a number of ways. Find out how here. If you want to send us a quick message, then visit our contact page.