Green Energy: Exactly how green is the UK's energy?
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Green energy: exactly how green is the UK’s energy?

25/01/2020

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Green energy is clean, infinite, and generated right here in the UK. British businesses want more and more of it… but how much of the UK’s energy is really green?

Green energy hit the headlines last year when the National Grid ran without coal for two whole weeks. You might even have seen the hashtag on Twitter – #CoalFreeFortnight.

That means our energy is green and getting greener, right?

Yes… and no. The real story is a bit more complicated.

The UK is using more green energy than ever before and in 2020 is set to use more green energy and carbon zero energy sources since the Industrial Revolution.

But, like any advanced economy, the UK is powered by a wide mix of different types of energy sources. While coal is rapidly being phased out (the amount of coal used in electricity generation has plunged from 30% to 3% over the last decade), the country is still heavily dependent on other fossil fuels.

So where does our energy come from, and how secure is our supply? Here’s a quick run down:

Imported power and gas

In 2017, the UK’s net energy imports made up 36% of its energy supply. These imports come from places like the EU, Russia, and Qatar. The UK hasn’t been a net exporter of energy since before 2004 and our dependence on overseas energy imports has increased every year since.

In 2017, gas and oil made up 90% of those imports:

  • Qatar is our primary LNG (Liquefied Natural Gas) supplier
  • Russia is our main source of solid fuel like coal
  • Belgium supplies us with natural gas via the interconnectors linking the UK to continental Europe
  • In 2017 Norway supplied us with 29,000,000 tonnes of crude oil

In this short summary alone, you can see how sensitive our energy supply is to geopolitical events around the world… and why energy imports can be such bad news for your bills

For example, after the Fukushima tsunami and the subsequent nuclear disaster in 2011, demand for Qatari LNG went up around the world as Japan and other countries turned off their reactors. The price of LNG went up, and that drove price increases right here in the UK.

With energy imports going up year on year and our supplies increasingly vulnerable to shocks around the world, investing in domestic green energy generation like wind, solar and tidal makes sense.

Natural gas

The UK uses a significant amount of natural gas, much of it imported from overseas. Natural gas has traditionally been considered a “transition fuel” as the economy moves towards green power sources.

Natural gas is cleaner than coal… but that doesn’t make it green.

Expensive to import, the UK actually has a domestic supply of natural shale gas that could be exploited. You’ve probably seen it mentioned in news reports about fracking – the extraction of natural shale gas from underground reserves.

Fracking is expensive, difficult, and carries a heavy environmental cost. It’s thought to cause everything from groundwater contamination to mild earthquakes.

The government temporarily halted fracking in November 2019 due to concerns about seismic activity and its impact on rural communities. However, the government is a long-term supporter of fracking in the UK and could reverse its decision at any time.

So while natural gas from fracking doesn’t play a large part in the UK’s energy mix, that could change in the months and years ahead.

Nuclear

Around 20% of the UK’s power is nuclear. Despite the operational hazards and the cost of decommissioning nuclear power stations once they close, nuclear is classed as a clean energy source because carbon emissions are low. Its primary power source is uranium – a rare resource that won’t last forever.

The government is hoping that nuclear will pick up some of the slack when the last of the UK’s coal power plants are taken offline by 2025, but this will be difficult to achieve. The UK’s nuclear power stations are ageing and all but one are due to be decommissioned by the end of the next decade.

Energy supplier EDF is constructing a new nuclear plant at Hinkley in Somerset. It will power 6m homes once complete – but EDF has already fixed the energy prices for the next 35 years as a condition of their involvement in the project

Over the past couple of years, nuclear power generation has actually dropped to mid-90s levels – a consequence of our changing economy, more energy efficient equipment and appliances being used in homes and businesses, and more and more renewable energy plants coming online.

So what about green energy?

In June 2019, National Grid reported for the first time that the UK has reached an exciting energy tipping point. The UK is now using more renewable and green energy sources than fossil fuels to generate the electricity that powers our homes and businesses.

In 2019, 47.9% of our electricity came from green and net carbon zero sources (as opposed to 46.6% from fossil fuels). 65% of the electricity we import from Europe now comes from carbon zero sources.

These numbers are only going to increase. This  year, a new interconnector between the UK and Norway will go live and bring 100% carbon zero electricity to the UK. The interconnector will stretch from Blyth in Northumberland to the Blasjo reservoir in Kvilldal, site of Northern Europe’s biggest hydro power plant.

While there are some questions about the impact Brexit could have on the UK’s use of the interconnectors, it’s hard not to feel positive about this change in our energy mix. For instance, wind turbines now generate 19% of our electricity – a huge leap from 1% in 2009!

It’s good news for the environment and, if we can generate more and more green energy here in the UK, it’s good news for our energy security, too.

What this means for British businesses

A decade ago, businesses paid a premium for green energy contracts. Now, that price premium has gone. For example, the cost of wind power has declined significantly over the past decade.

That means businesses can now ask for a green energy contract and expect to pay almost or exactly the same price as they would for a conventional energy contract.

(In a few years time, this split won’t even exist when it comes to electricity contracts – renewables will generate more of our electricity than any fossil fuel type.)

So when your business energy contract next comes up for renewal, ask about a green energy contract and find out if there’s a price difference.

You never know – it might even be cheaper than a standard contract.

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