By Ahmad Ali
History behind the energy crisis of the UK
The COVID-19 pandemic in 2021, which led to shortages and rising prices throughout the oil, gas, and power sectors in a sizable portion of the world, served as the catalyst for the start of the 2021–2023 global energy crisis.
The quick post-pandemic economic recovery that outpaced the energy supply was one of several economic variables that contributed to the tragedy. It got worse after Russia invaded Ukraine in 2022, which sparked a widespread global energy crisis. Because the Covid-19 limits were lifted and Russian supply lines were hampered by the conflict in Ukraine, gas demand has surged significantly, leading to a substantial spike in energy costs(BBC, 2022).Natural gas prices reached record highs, which resulted in a rise in power rates across the board. At this time, oil prices increased to their highest level since 2008 (Agency, 2022).
Fundamental energy consumption dropped by 11% in 2020 compared to 2019, which was significantly impacted by the Covid-19 pandemic’s impacts on the energy supply. Primary energy consumption decreased by 10% in 2020 compared to 2019 on a temperature-corrected basis, following the downward trend that has been seen since 2005. In comparison to 2019, the average temperature was 0.3 degrees Celsius higher in 2020. The use of natural gas and primary electricity has greatly grown during the past 31 years, while the usage of oil and coal has dropped. However, during the past 10 years, both the usage of bioenergy and waste have risen. (STATISTICS, 2022).
Soaring energy costs made it difficult for people to make ends meet, prompted numerous firms to reduce output or shut down altogether, and hampered economic development. Due to its historical reliance on Russian gas supplies, Europe may experience gas restrictions during the winter of 2022–2023, despite the fact that many developing economies have experienced rising energy import costs and fuel shortages(Agency, 2022). Less is known about the policy measures available to address the situation. The majority of European nations, particularly the UK, place a strong emphasis on using government transfers and subsidies to shield people from rising energy costs. There is not much focus on other policy initiatives (Milne, 17 Sep 2022).
Europe is being affected by increasing energy costs significantly almost as much as the world as a whole. The main contributing cause is the diminishing Russian gas supply, which has provided 25% of global gas usage and about 50% of Europe’s imports of gas (about 500 billion cubic metres or bcm consumption for all European countries including those outside the EU such as the EU and the UK). The tight integration of the European gas industry that has grown over the past thirty years has an impact on all of Europe. North-Western Europe effectively functions as a common market with nearly comparable wholesale pricing since gas from Russia and Norway is diverted to areas with the highest prices (Milne, 17 Sep 2022).
The cost-of-living problem is being fueled by the exceptional energy crisis in the UK. 4.5 million families in the UK experienced fuel poverty and anticipate 8.4 million by the end of 2023 April, according to National Energy Action (NEA, 2022). Due to increasing debt that suppliers may not be able to pay off this winter, more than half of UK homes run the risk of being energy poor (Mathis, 2022). A “credible scenario” for which we need to prepare, according to Keith Bell, professor of electronic and electrical engineering at Strathclyde University, is turning off certain gas supply to major industrial customers.The wholesale gas prices are escalating.
According to the National Grid survey the latest figures from 2022 (which were announced in 2020), over fifty percent of the power generated in the UK comes from sources which were free of carbon, up from a pitiful twenty percent in 2010.
Energy and electricity sources from abroad
Additionally, the UK imports power from nearby nations including France, Ireland, and the Netherlands. Through links known as interconnectors, these nations can deliver power they have produced to the UK.Actually a previous fire at the French interconnector a year ago was a factor in the UK’s skyrocketing energy rates. For instance, Statistic reports that 19.7 terawatt hours of power were exported from France to the United Kingdom in 2021. Electricity was imported into the UK in quantities of 5.8 terawatt hours(energyguide, 2022).
Dependence on coal as a fuel
Over time, the United Kingdom became less dependent on fossil fuels, particularly coal, to provide power. As opposed to about 29 million tons of coal two decades earlier, the nation utilized 1.68 million metric tons of oil in 2021. With 22 million tons of oil equivalent, gas was the primary fuel utilized in that year.
Change in the usage of renewable energy in the UK
Approximately 2% of the power generated in the UK at the conclusion of 1991 came from renewable sources. This percentage had increased to 14.6% by 2013. In 2017, Britain became a frontrunner in Europe when it came of boosting the production of renewable energy.
Only nations like Sweden, Norway, and Iceland, who have more established renewable energy regulations, utilised more energy in relation to their populations.The generation of energy with no carbon emissions surpassed that of fossil fuels for the first time in 2019 on August 17, when it reached its greatest level recorded(nuclear 20%, hydro 1%,wind 39%, and solar 25%,).Each of the accompanying components renewable sources made a contribution during the final quarter of 2021.
Onshore as well as offshore wind both supplied 12% and 14%, respectively, to the UK’s overall electricity output in the fourth quarter of 2021. Bioenergy, which is produced by burning biological resources that are still available, made up 12.7% of the total amount of renewable energy used. Due to an increase in installed capacity of 0.7 gigawatts (GW), solar power’s 1.8% contribution of the mix of renewable energies was a 24% increase from Q4 2020. Tidal and hydropower made for 2.1% of the mix of renewable energy sources. (nationalgrid, 2022).
UK gas reservoir
The purchase of gas from countries like Algeria, Norway, and Azerbaijan was quickly increased by Europeans. The government of UK has turned to Qatar in quest of a long-term gas arrangement in order to make sure a steady supply of liquefied natural gas (LNG) to the UK (Standard, 2021). The aid of Sheikh Tamim bin Hamad Al Thani, the Emir of Qatar, was solicited by Prime Minister Boris Johnson during a meeting at the UN General Assembly in September 2021 (DOHANEWS, 2021).
As part of voluntary goals to reduce gas and electricity use by 15% through efficiency measures, increased use of renewable sources of energy and assistance for efficiency improvements, the UK government also established responsibilities for gas storage.Keith Bell identified two big supply challenges going into the winter: due to a shortage of storage space and the UK’s dependence on imported gas. Gas combustion accounted for about 40% of the electricity generated in the UK last year, whereas 38% of all energy was imported. The UK has much less gas storage than other European country, Germany is at the top of the list while Italy is next.
Future predictions for UK electricity production
By 2050, the government of UK hopes to have zero carbon dioxide emissions. The UK government has made it explicit in its most current Energy Security policy, which was revealed in April, that its eventual aim is to establish a carbon-neutral or net-zero economy. It also demonstrates how crucial natural gas and oil security will be for supporting us in accomplishing the low-carbon transition in the near future.
The plan outlines the exact actions that the UK government will take over the course of several decades to transform our energy output to zero-carbon. For instance, the strategy aims to increase the UK’s wind energy output to 50 gigawatts by 2030. Large floating wind farms that can be placed far from the UK’s coast will make up 10% of these (energyguide, 2022).
The energy security strategy of the UK government
On April 7, 2022, the British government published the British Energy Security Strategy. The strategy argues for quickening the transition of the UK to an energy-independent, low-carbon future.
The strategy was released in response to worries regarding the energy supply’s dependability, accessibility, and sustainability of UK. Worries about rising prices of gas at the wholesale level, the effects of Russia’s invasion of Ukraine, the recent failure of several energy suppliers of UK, and an increase in the energy price cap set by electricity and gas regulator Ofgem are just a few of the global and local issues that are causing this anxiety(Parliament, 2022).
According to the official explanation of the UK government’s energy security strategy, the policy’s main goals are for the UK to gain long lasting independence from foreign energy sources and decarbonize the country’s power supply (energyguide, 2022).
What rules does the strategy contain?
The policy emphasizes increasing local UK energy production while also pledging to stop importing Russian oil, coal, and gas “as soon as practically practicable after” 2022. The regulations comprise:
- Plans to increase the use of reserves of North Sea,
- Commission a scientific review of gas extraction from shale sources,
- Create around about 4 new carbon capture, use, and store clusters are objectives by 2030,
- Propose a reduction in gas consumption of over 40% by that year,
- As well as higher targets for the production of low-carbon electricity compared to the Energy White Paper’s earlier targets.
- A North Sea Transition Deal that lays out strategies for the infrastructure and funding needed to sustain “decarbonized” oil and gas exploitation.
- Reduced approval timeframes for offshore wind planning from four to one years; a new delivery organization for nuclear power (Great British Nuclear) to complete investment choices for the eight new major nuclear reactors by 2030 (Parliament, 2022).
So, what precisely does the strategy state?
It describes in detail the government’s goals for each of the UK’s energy sectors and breaks down each one by following sector:
- Wind Energy (increasing wind energy output to 50GW by 2030)
- Solar Energy (increasing solar energy output to 70GW by 2035)
- Nuclear Energy (tripling nuclear energy output to 24GW by 2050)
- Hydro Energy (Doubling hydro energy to 10GW by 2030)