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How the UK’s Energy Mix is Being Transformed

Some of the key trends in the UK’s energy transformation are revealed by these statistics:

  • 21st April 2017 was the first coal-free day for power generation in Britain since the industrial revolution.
  • 7th June 2017 saw renewables provide more than half the UK’s electricity for the first time.
  • Solar power output set a new record at noon on the 26 May accounting for 8.7 GW or 24.3 per cent of demand.
  • The UK generated more electricity from wind than from coal in 2016.
  • The renewable power share hit a new record of 29.8% in Q2 2017, with the summer of 2017 having 52% of power generation coming from low carbon sources compared to 35% in 2013.
  • The contracts for difference auction achieved a strike price for offshore wind of £57.50 / MWh in 2017, a 50% saving compared to 2015.
  • By the end of 2016 the UK had over 900,000 solar PV installations, up from only 8,000 six years earlier.
  • CO2 emissions from UK electricity generation in 2016 were approximately half those in 2010.

 

THE HISTORICAL SOURCES OF ENERGY SUPPLY

The UK’s electricity supply comes from thermal sources including nuclear, coal, gas and biofuels and renewable sources such as wind, solar, hydro and tidal. Although the first public supply of electricity in the 1880’s used hydro power, coal quickly became the fuel of choice. In the 1950’s and 1960’s the majority of energy produced in the UK was from coal. Oil began to be used for generation in the 1950s and reached its peak in the early 1970’s overtaking hydro to become the second largest source of power but declined following the oil crises of the 70’s. By 1990 coal was still providing three quarters of the UK’s power but by 1995 this had reduced to 35 per cent and has stayed more or less at that level until its recent decline.

The energy mix began to change with the development of nuclear power and subsequently as the UK started to produce its own gas. The first nuclear power stations began generating at commercial scale in the 1960’s, nuclear increased its share to over 20 per cent of total supply in 1990 and has continued to provide a relatively consistent base load at this level. The use of gas as a major fuel for generation dates from the commissioning of the first CCGT station in 1992. By 1995 gas supplied almost 20 per cent, fluctuating under the influence of prices and availability of other sources and has steadily increased to now supply over 40 percent. By 2008 renewable power had started to make its mark and was providing around 5 per cent of total generation, increasing rapidly to supply over 25% by 2015.          

 

THE ENERGY MIX OVER THE LAST 5 YEARS

In 2010, gas and coal together accounted for around 75% of the electricity generated in the UK. In 2016 this combined percentage has fallen to around 50%. Shares of generation shifted significantly from coal to gas in 2016 as a number of plants closed or switched to burning biomass. Coal’s share fell from 22 per cent in 2015 to 9 per cent in 2016. The share was taken by gas which rose 13 percentage points from 29 per cent to 42 percent.

Low-carbon electricity’s share of generation (renewables and nuclear) has remained at over 45%. Nuclear energy has continued to account for around 20% of generation. The biggest growth has been in renewables which increased from less than 10% to 25% of the energy mix, although renewables’ share of generation remained at 25 per cent during 2015 and 2016. The increased renewables generation capacity installed in 2016 was balanced by less favourable weather conditions for solar and wind generation.

 

The Trends in the UK's Energy Mix over the last 5 years

 

THE UK’S CURRENT ENERGY MIX

In 2016, the total UK electricity supply was 357 TWh, slightly lower than the 360 TWh figure in 2015 due to improving energy efficiency and overall warmer temperatures. Of this total supply, just over 95 per cent was generated in the UK with 5 per cent coming from imports.

The maximum load (demand) in the UK during the winter of 2016/2017 was 52,909 MW, which occurred on 26 January 2017, in the half-hour ending 18:00 which was 0.3 per cent higher than the previous winter’s maximum (on 18 January 2016). The total installed capacity of major UK power stations was 79,815 MW at the end of May 2017. Maximum demand was 77 per cent of the UK capacity of major power producers.

 

The UK Energy Mix in 2016

 

COAL and GAS

The drop in electricity produced from coal reflected the closure or temporary shutdown of coal power stations (Ferrybridge C in Yorkshire and Longannet in Scotland) and the effect of the UK’s carbon tax which increased from £9 per tonne of CO2 to £18 per tonne of CO2.

Although fuel costs for coal fired generation are lower than for gas, coal generation produces more than double the carbon dioxide per GWh of electricity supplied, so the increase in carbon tax has made coal more expensive. This has made coal-fired plants use more suitable for reserve generation for periods of highest demand or when supply capacity has been reduced. For similar reasons oil fired generation remains as a back-up supply although crude oil prices averaged around $45 per barrel in 2016, down from $54 per barrel in 2015 and just under $100 per barrel in 2014.

This switch from coal to gas for generation has resulted in a sharp decrease in carbon dioxide emissions between 2015 and 2016. Provisional BEIS estimates suggest that overall emissions fell by 29.8 million tonnes of carbon dioxide (MtCO2) (7.4 per cent) to 374.1 MtCO2 between 2015 and 2016.

 

NUCLEAR

The UK currently has eight active nuclear power stations, with a combined capacity of 8.9 gigawatts. Nuclear generation rose 2 per cent from 70 TWh to 72 TWh in 2016 maintaining the nuclear share of generation at approximately 20%. Nuclear plants had fewer planned and unplanned outages than in 2015, with a load factor at 78.4 per cent, some 3.3 percentage points higher than in 2015, and the highest since 80.1 per cent was achieved in 1998. Generally, nuclear efficiency has remained between 38 and 40 per cent over the last decade, with a rise of 0.9 percentage points from 2015 to 40 per cent in 2016.

UK nuclear generation is down by more than a quarter since a 1998 peak, due to the shut down of some 4GW of capacity at eight sites. Seven of the UK’s eight existing nuclear power stations, which began generating electricity in the 1970s and 1980s, are expected to come off the grid by 2030. The 1GW Hunterston B and 1GW Hinkley Point B are scheduled to close in 2023, the 1.2GW plants at Heysham 1 and Hartlepool are due to close in 2024, the 1GW Dungeness B in 2028 and the 1.2GW Heysham 2 and Torness plants in 2030.

Five new build nuclear projects are being progressed to replace the retiring fleet requiring a capital investment of at least £60 billion. The 3.2GW Hinkley Point C project is the only plant currently under construction, with its two reactors scheduled to start operation in 2026 and 2027. Sizewell in Suffolk, Wylfa in Wales, Oldbury in Gloucestershire, Moorside in Cumbria and Chinese designed reactors at Bradwell in Essex, are still at the planning and approval stages, providing a combined capacity of up to 16GW. Challenges remain in progressing each of the projects due to difficulties in securing the private investors needed to fund the construction of the plants within a strike price low enough to be attractive to the government.

See our e-book Nuclear – A Supply Chain Guide for more information on the UK Nuclear Sector.

 

RENEWABLES

Renewable sources provided 24.5 per cent of the electricity generated in the UK in 2016 slightly down on the 2015 figure (measured using the “international basis”, which includes electricity generated from all renewables except non-biodegradable wastes).

Total renewables generation capacity increased between 2015 and 2016 by 16 per cent to 35.7 GW. Solar photovoltaics was the leading technology representing a third of total electricity capacity at 11.9 GW. Wind generation showed an increase in capacity of 1.9 GW (13 per cent), mostly in onshore wind.

Generation from renewables fell marginally by 0.2 per cent in 2016 to 83.2 TWh, due to lower rainfall and wind speeds resulting in lower hydro and wind generation. Bioenergy accounted for 36 per cent, followed by onshore wind at 25 per cent and offshore wind at 20 per cent.

Although the increase in capacity has resulted in solar photovoltaics being the leading technology by capacity, its share of generation is fourth after onshore wind, offshore wind, and bioenergy. This is due to solar photovoltaics having a low load factor compared to other technologies.

 

Sources of Renewable Electricity Generation in 2016

 

The share of generation and capacity by renewable technologies in 2016 and their associated load factor (a measure of the average output relative to its installed capacity), is detailed in the following table.

 

 

Share of total capacity

Share of total generation

Load factor

Solar photovoltaics

33.3%

12.5%

11.1%

Onshore wind

30.6%

25.2%

23.7%

Bioenergy

16.1%

36.1%

62.0%

Offshore wind

14.8%

19.7%

36.0%

Hydro

5.1%

6.5%

34.0%

Total

100%

100%

 

 

The table shows that the technologies with highest capacity do not necessarily have the highest share of generation, since this depends on the load factor. For renewables, load factors can be heavily influenced by weather conditions, wind speeds affect the load factors for onshore and offshore wind, rainfall similarly impacts the load factor for hydro and average hours of sunshine impacts the load factor for solar PV.

 

WIND

Total wind generation fell by 7.3 per cent to 37.4 TWh, despite an increase in capacity of 1.9 GW (13 per cent), mostly in onshore wind. The reduction in generation is due to lower wind speeds in 2016 compared to 2015, as wind speeds for 2015 had been the highest for the preceding 15 years. The onshore wind load factor fell from the record 29.4 per cent in 2015 to 24.2 per cent in 2016, and the offshore wind load factor fell from 39.7 per cent to 36.7 per cent in 2016.

Onshore wind saw the largest fall in generation, by 8.4 per cent to 21.0 GWh in 2016, despite a record 1.7 GW (18 per cent) increase in capacity, including Dunmaglass (94 MW) and Dersalloch (69 MW) in Scotland, and the first 156 MW of Wales’s largest onshore wind farm, Pen y Cymoedd (256 MW on completion).

Offshore wind generation fell by 1.0 GWh (5.8 per cent), less than for onshore wind but with a much smaller increase in capacity. Capacity is now at 5.3 GW, an increase of 3.9 per cent (200 MW) on 2015, due to the installation of the first 25 turbines at the extension to Burbo Bank offshore wind farm in late 2016.

The contracts for difference auction in 2017 produced a strike price for offshore wind of £57.50 / MWh, a 50% saving compared to 2015. Two of the three winning projects were awarded a 15-year Contract for Difference (CfD) at this strike price.

  • The largest scheme is the Dong Energy-financed 1.4 GW, Hornsea 2 development, 89 kilometres off the Yorkshire coast which is promoted as being the world's largest offshore wind farm and is expected to be operational from 2022. Dong is currently building the first phase of the Hornsea project, which has a capacity for 1.2 GW and was guaranteed a price of £140 per MWh.
  • The 950 MW wind-farm promoted by Portugal’s Electricidad de Portugal Renovaveis (EDPR) will be constructed near Moray, off the north-east coast of Scotland, consisting of one hundred, 280 m high, 9.5 MW turbines, at a projected cost in the order of £1.8 billion.
  • The third successful bidder is the Innogy/Statkraft, 860 MW project at Triton Knoll, which is located off the coast of Lincolnshire, at the higher strike price of £74.75, requiring a capital expenditure in the order of £2 billion, which is scheduled to be operational in 2021.

The UK has more offshore wind power capacity than any other country in the world, and while those on land still provide 50% more power than those at sea, any major extension of on-shore wind capacity is likely to be constrained by nimby-related issues.

 

SOLAR

A significant increase in solar capacity of 25 per cent to 11.9 GW occurred in 2016. For the second year, solar PV is the leading technology in capacity terms, representing a third of total renewable capacity.

Solar photovoltaic also showed the largest increase in generation of the renewable technologies, up by 38 per cent (2.9 TWh) to 10.4 TWh in 2016 due to the increase in capacity. However, solar only accounts for 13 per cent of total renewable generation due to a lower load factor which decreased in 2016 due to shorter average hours of sunshine equating to 4.2 hours per day compared to the ten year mean of 4.4 hours per day.

Most of the UK’s solar farms are relatively small, and only around 80 can generate more than 20MW. Britain’s biggest existing solar farm produces 69MW. Plans have been unveiled for the UK’s largest solar farm on the Kent coast which would cover 900 acres of farmland and could have a capacity of up to 350MW. 

Domestic electricity generation by households with micro-generation units has increased sharply since the Feed in Tariff scheme was launched in April 2010. In 2016, consumption of self-produced electricity by the domestic sector increased by 20 per cent on 2015, to 1,356 GWh, which was more than fifty times the 23 GWh consumed in 2010. However, self-produced electricity still accounts for only 1.3 per cent of domestic consumption.

 

BIOMASS

Generation from bioenergy increased by 2.7 per cent to 30.0 TWh, whilst capacity increased by 9 per cent to 5.7 GW. The majority of the increase in generation was from anaerobic digestion with plant biomass accounting for most of the increase in capacity.

Of the 244 MW of new plant biomass capacity, the Brigg and Snetterton straw–fired plants accounted for around 100 MW, with the remainder being smaller plants. There were several new energy from waste sites in 2016, including the 50 MW scheme at the Wilton complex at Redcar. This new capacity resulted in growth of 10 per cent to 1.0 GW in 2016, and prompted growth in generation from non-biodegradable waste of 6 per cent, to 2.7 TWh.  

Generation from landfill gas fell for the fifth year in a row, as sites continue to become exhausted, and increasing quantities of waste are being recycled. Generation peaked in 2011 at 5.3 TWh and was 4.7 TWh in 2016, a decrease of 12 per cent. Generation fell by 3.5 per cent between 2015 and 2016. Growth in sewage gas generation was 6.3 per cent, achieving 1.0 TWh in 2016, due to an 11 per cent growth in capacity (to 0.3 GW).

The UK’s biggest power station, Drax in North Yorkshire, has already converted three of its six units from coal to biomass, and is exploring switching a fourth. Biomass is the only renewable technology that can be flexed up and down to meet demand and balance more intermittent renewables.

 

HYDRO

Hydro generation fell, by 14 per cent to 5.4 TWh in 2016, partly due to 2015 being a record year, as a result of high rainfall. Average rainfall in 2016 was 1,386 mm compared to 1,723 mm in 2015, the wettest year in the preceding fifteen years. Whilst large-scale hydro capacity remained unchanged, an increase in schemes supported by Feed in Tariff schemes increased small-scale hydro by a record 59 MW (20 per cent).

The financing of large scale schemes such as the Swansea Bay Tidal Lagoon project remains challenging. The high strike price proposed for the lagoon schemes is becoming increasingly difficult to accept by the Treasury as the price for competing renewable technologies continues to fall. The MayGen tidal scheme in Scotland missed the cut by failing to win a CfD in the 2017 auction where tidal schemes had to compete directly with technologically more mature offshore wind projects.

 

ENERGY STORAGE AND BALANCING

Balancing schemes can take the form of pumped storage, a variant on hydro-electric power that pumps water at periods of low energy demand and releases the water at times of high demand. The largest of these schemes is Dinorwig in Snowdonia with a capacity of 1.6 GW.

At 10MW, the Blackburn Meadows battery is one of the biggest battery storage schemes in Britain so far, but will soon be eclipsed by much larger plants including Centrica’s 49MW facility in Cumbria and an EDF Energy facility at the West Burton gas power station in Nottinghamshire.

 

ENERGY IMPORTS

Net imports in 2016 were down by 16 per cent to 18 TWh compared to the record 21 TWh in 2015. The UK has four interconnectors: England-France (2 GW capacity), England-Netherlands (1 GW), Northern Ireland-Ireland (0.6 GW) and Wales-Ireland (0.5 GW). Imports fell by 13 per cent whilst exports increased 21 per cent as nuclear outages in France increased export demand. The France-UK interconnector was damaged by a ship’s anchor in November 2016 which halved its capacity for the rest of the year. The UK was a net importer from the Republic of Ireland for the first time since the Ireland-Wales interconnector opened in 2012, with a 0.9 TWh net export in 2015 switching to a 0.5 TWh net import in 2016, due to reduced availability from France.

 

THE ENERGY MIX IN THE 2ND QUARTER 2017

The most recent electricity generation figures for the second quarter of 2017 as detailed in the “Energy Trends” report by the Department for Business, Energy and Industrial Strategy (BEIS) shows a record 29.8 per cent of the UK’s energy was generated by renewable energy sources, up 4.4 percentage points on the share for April to June last year and exceeding the previous record of 26.9% set in the first quarter of the year.

Total renewable electricity capacity was 38GW during the 3 month period, up by 4.4 GW from a year earlier and by 0.6 GW from the preceding quarter. At the end of June, solar PV represented one-third of all renewable capacity at 12.5GW, with 12.2 GW of onshore wind and nearly 5.7 GW of offshore wind.

Renewable electricity output rose to 22.5 TWh from 19.8 TWh in the second quarter of 2016, although it remained below the peak quarterly level of 25 TWh in the first quarter of 2017. Onshore wind generation showed the highest increase of 50 per cent, from 4TWh in the same time period last year to 6TWh, accounting for 27% of renewables generation. Generation from offshore wind was up by 22 per cent to 4TWh, the same as solar photovoltaic (PV) with each provided 18%. Bioenergy had a 34% share and 3.7% came from hydro.

 

INTERNATIONAL TRENDS

The International Energy Agency has provided the following statistics

  • Two-thirds of additional global power generating capacity in 2016 came from renewables.
  • By 2022, renewables could provide 30 per cent of the global power market with a total growth in capacity of over 920 GW. 
  • According to the International Energy Agency there was $316bn invested in renewable energy worldwide last year, almost three times as much as the $117bn in fossil fuel power generation.
  • Europe recently generated a new high of 263 gigawatt hours of power from offshore turbines, 95GWh of which came from the UK.
  • Solar power capacity grew by 50 % in 2016 and is set to add another 660 GW by 2022.
  • 8 GW of large-scale wind and solar capacity and 11 GW of gas went in service in the first nine months of 2017 in the US, with wind power capacity up by 79% and solar by 21% from a year earlier.
  • Battery prices have dropped by almost half since 2014, with large-scale lithium-ion battery projects with total capacity of 1,650 megawatts per hour constructed in 2017, four times the amount for all of 2016, including Elon Musk’s installation of the world’s biggest battery in Australia which is due to be surpassed by a Hyundai 150-megawatt unit in South Korea.
  • China consumes 25 per cent of energy used globally each day. Coal dominates Chinese energy providing almost two-thirds of total demand using over 50 per cent of all the coal burnt globally. China's energy plan targets the use of non-fossil fuels to rise to 15 per cent by 2020, and to 20 per cent by 2030 with the goal for 2050 to reduce the share of fossil fuels to less than half the total. Over the last year China has accounted for 40 per cent of the global growth in renewables. 

A comparison of countries over the last 10 years shows that the UK has increased its renewable share of electricity generation from 2 to 25 per cent, Germany from 9 to 29 percent, China from 6 to 10 percent and the USA from 3 to 9 percent.

 

FUTURE TRENDS IN ENERGY SUPPLY

The UK’s energy supplies have shifted significantly from their reliance on coal which is due to be phased out within a 10 year timeline. Projections show gas-fired generating plants being required to pick up the shortfall in the near- to medium-term, with the improving cost effectiveness of renewables projected to supply the largest proportion of power to the grid within a 5 year timeline.

Plans for investment in carbon capture and storage have been scaled back, and government support has been indicated for the use of fracking of shale gas to reduce reliance on gas imports and the continued construction of nuclear generation. The potential for delays in nuclear new build may require additional renewable and gas generation supplies or a postponement in decommissioning some of the coal plants. Small modular nuclear reactors show promise for lowering costs and the government is facilitating their development.

One of the most exciting areas of innovation could occur in energy storage which along with better demand management may create the opportunity for intermittent sources such as wind to develop a larger share. This may become increasingly important as demand for renewable power rises to meet the transition towards electric vehicles.

While the rise of renewables is set to continue, a balanced portfolio made up of gas, nuclear, and renewables is likely to be promoted by the UK government to meet the key policy objectives of affordability, sustainability and security of supply.

 

Shane Keaney is a director of A2O People a Recruitment and People Consultancy specialising in the Nuclear, Energy, Water & Construction sectors. You can learn more about our Recruitment, Consultancy and Training services on our website www.a2opeople.co.uk, or by emailing us at connect@a2opeople.co.uk or calling 01278 732073.

If you are interested in job opportunities in the construction sector or on the Hinkley Point C nuclear project you can register your CV, email connect@a2opeople.co.uk or call 01278 732073. 

A2O People are a member of the Hinkley Point C Professional Services Group and are a certified ECITB Training Provider. We have developed a Guide for Job Seekers for people interested in working in the nuclear sector.

Feel free to follow or connect with me on LinkedIn.

 

 

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