United Kingdom Energy Situation

From energypedia
United Kingdom
Flag of United Kingdom.png
Location _______.png

Capital:

London

Region:

Coordinates:

51.5000° N, 0.1167° W

Total Area (km²): It includes a country's total area, including areas under inland bodies of water and some coastal waterways.

243,610

Population: It is based on the de facto definition of population, which counts all residents regardless of legal status or citizenship--except for refugees not permanently settled in the country of asylum, who are generally considered part of the population of their country of origin.

67,215,293 (2020)

Rural Population (% of total population): It refers to people living in rural areas as defined by national statistical offices. It is calculated as the difference between total population and urban population.

16 (2020)

GDP (current US$): It is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products. It is calculated without making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources.

2,707,743,777,174 (2020)

GDP Per Capita (current US$): It is gross domestic product divided by midyear population

40,284.64 (2020)

Access to Electricity (% of population): It is the percentage of population with access to electricity.

100.00 (2019)

Energy Imports Net (% of energy use): It is estimated as energy use less production, both measured in oil equivalents. A negative value indicates that the country is a net exporter. Energy use refers to use of primary energy before transformation to other end-use fuels, which is equal to indigenous production plus imports and stock changes, minus exports and fuels supplied to ships and aircraft engaged in international transport.

34.63 (2015)

Fossil Fuel Energy Consumption (% of total): It comprises coal, oil, petroleum, and natural gas products.

80.35 (2015)

Source: World Bank



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Introduction

Energy Situation

Brexit

There is a spectrum of possibilities for the UK’s future relationship with the EU ETS, ranging from continued membership, through to linking, or to full separation

Renewable Energy

Nuclear Energy

The UK government has announced 4 nuclear-mix projections under the Carbon Plan. The total installed capacity is expected to be around 16-75 GW

Fossil Fuel

Key Problems of the Energy Sector

Policy Framework, Laws and Regulations

UK' energy strategy focuses on the following agenda:

  • Low carbon innovation
  • Exploiting Renewable sources
  • Investing in new nuclear power
  • Creating a CC-Storage
  • Reform the markte


Polices 

  • EU‘s Large Combustion Plant Directive , 2001: Under this Initiative., many old coal power plants were shut down and emission form large thermal plant was reduced.
  • Climate Change Levy (CCL)  2001: CCL is applied to fuel sources other than renewables such as gas, LPG, electricity and coal. The rates of the levy depend on the energy content of hte different energy products. The purpose of the levy is to encourage energy efficiency and help UK meet its energy targets.
  • Climate change Act 2008 :  overall targe to 80% reduction of GHG of 1990 levels by 2050
    • Budget 1 (2008–12): 3018 MtCO2e (25% below 1990 baseline)
    • Budget 2 ( 2013–17): 2782 MtCO2e (31% below baseline)
    • Budget 3 (2018–22): 2544 MtCO2e (37% below baseline by 2020 )
    • Budget 4 (2023- 2027): 1959 MtCO2e (51% below baseline by 2025)
    • Budget 5 (2028- 2032): 1725 MtCO2e (57% below baseline by 2030) – after Brexit Overall target of reducing GHG by 80% of 1990 levels by 2050.
  • European Union (EU) Directive 2009/28/EC: This directive requires each EU member state to increase the share of renewable energy in its gross final consumption. such that the overall EU target of 20% share of renewables in achieved. The directive also include a target of 10% renewable energy share in transport. 
    UK, under this directive  is set to achieve at least a 15% renewable energy share by 2020.

Policy Instruments

Climate Change

  • Carbon Tax 2013-2020: Carbon tax, known as the carbon price floor, was introduced in 2013 to charge fossil fuel power plants for their carbon emissions. As of 2018, the carbon tax is £18 ($25) per ton of carbon dioxide emitted in producing electricity. Since UK is also a member of EU's emission trading scheme, it also pays a market-based price for for carbon credits, which is about £5 per ton of CO2. Whenever the carbon price in the EU’s Emissions Trading System (ETS) is less than the U.K. price floow — which has been essentially all of the time since 2012 — the producers pay the difference to the British Treasury. [1][2]

Renewables - Electricity generation

  • Renewables Obligation (RO) 2002: It  requires electricity generators to source a proportion of their electricity from eligible renewable sources.
  • Feed in Tariffs (FIT) 2000
  • Contract for Difference (CfD) (2014): This policy aims to replace the RO introduced in 2002 and is designed to suport large scale renewable generation (more than 5 MW). It is based on the difference between the market price and an agreed “strike price”.If the “strike price” is higher than a market price, the CfD Counterparty must pay renewable generator the difference in amount. If the market price is higher than the agreed “strike price”, renewable generator must pay back the CfD Counterparty the difference in amount[3]

Heat

  • Renewable Heat Incentive (RHI) - It provides incentives to install renewable heating in place of fossil fuel based heating systems.[4]

Transport

  • Renewable Transport Fuel Obligation (RTFO) 2002: Under this policy, suppliers of transport and non road mobile machinery (NRMM) fuel in the UK must show that a percentage of the fuel they supply comes from renewable and sustainable sources. Fuel suppliers who supply at least 450,000 litres of fuel a year are affected. This includes suppliers of biofuels as well as suppliers of fossil fuel.
  • Preferential Tax Regimes for Biofuels (2002)- reduced exercise duty for biofuels
  • Biofuels Duty Incentive (2002)
  • Bio-energy Capital Grants Scheme (2002)

Because of all these different measures, UK businesses already have the second highest energy bills in the EU. These social polices add 20% to the energy bill.

Institutional Set up in the Energy Sector

Further Information

References