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The Global Energy Mix and How the UK Compares

WORLDWIDE TRENDS IN ELECTRICTY GENERATION

Global power generation rose by 2.8% in 2017, up from a rise of 1.2% the previous year. Power generation in the OECD has remained relatively flat since 2010 with the majority of growth coming from emerging economies, China alone contributing over a third of that growth. Perhaps one of the more astonishing statistics is that approximately 1.06 billion people worldwide still live without electricity.

Renewable energy accounted for an estimated 70% of net additions to global power capacity in 2017, up from 63% in 2016. Although renewables have seen significant growth, it is somewhat surprising that there has been almost no improvement in the energy mix towards low carbon generation statistically over the past 20 years, as the growth of renewables hasn’t offset a decline in nuclear generation.

The share of coal in 1998 was 38%, exactly the same as in 2017, which can in part be associated with China’s rapid expansion in the 2000’s. Considering the last 10 years, renewables have risen 6.1% percentage points since 2007 while nuclear has declined by 3.4% and coal has declined 3.1%.

Globally coal remains the main source of power in 2017 with a share of 38% and with 654 GW of new coal plants currently in development worldwide. Gas has a 23% share, while hydroelectricity is at 16% and renewables at 8.4%.

The share of renewables in global power generation increased from 7.4% in 2016 to 8.4%. In volume terms, the largest increase was in China, followed by the US, and Germany, Japan, and India making up the top five.

In terms of the percentage supplied by renewables Denmark leads with 68%, Germany has 30%, with 25% in Spain, and 23% in Italy. The UK compares favourably with a 29% share. China alone has nearly 30% of the world’s renewable power capacity, totalling approximately 647 GW, including about 313 GW of hydropower. In the United States, renewable energy accounted for 18% of total electricity generation, up from 15% in 2016.

In 2017, for the first time, electricity generation in the EU from non-hydropower renewables (wind, solar and biomass) overtook coal generation, and renewables generated 30% of the region’s electricity. For comparison, just five years ago, coal generation was more than twice the generation from wind, solar and biomass power combined. Continuing an ongoing trend 85% of newly installed power capacity in the EU was renewable. Germany and the UK alone contributed to 56% of the growth in renewables in the past three years. Three more Member States announced coal phase-outs in 2017, Netherlands, Italy and Portugal who join France and the UK in committing to phase-out coal.

Wind power generating capacity grew by 10% in 2017 worldwide, with capacity increasing by 47 GW to reach 515 GW. China leads the world in terms of installed wind capacity (164 GW), adding 15 GW in 2017, followed by the US (6 GW), Germany (6 GW), India (4 GW) and the UK (4 GW). Wind power now provides in the order of 5% of total world electricity generation. Wind contributed just under 6% of power generation in the US and under 4% in China. In the EU the growth in renewables has become much more concentrated towards wind which had accounted for 46% of the EU renewables growth from 2011 to 2014, but this increased to 72% of the growth from 2014 to 2017.

Solar generation increased by more than a third globally, while solar capacity increased by nearly 100 GW last year, more than fossil fuels and nuclear power combined, with China building over 50 GW. This growth continues to be aided by continuing falls in solar costs, increasing access to finance, and policy support. However, solar power still only provides in the order of 2% of total world electricity generation.

Global nuclear power generation in 2017 increased for the fifth consecutive year, reaching 2,506 TWh. At the end of 2017 the capacity of the 448 operable reactors stood at 392 GWe, up 2 GWe compared with a year earlier. Five reactors were shut down, with a combined capacity of 3,025 MWe. The total number of reactors under construction fell by two to 59 over the course of 2017.

The power sector is the single highest source accounting for over a third of carbon emissions. Energy-related carbon dioxide (CO2) emissions rose for the first time in four years by an estimated 1.4% in 2017 mainly due to growth in energy demand and coal consumption. The US is bucking the global trend by reversing regulations requiring reductions in carbon-dioxide emissions which could see an increase in usage of coal. There is some cause for optimism though as China launched the world’s largest emissions trading scheme, and a coalition of governments launched Carbon Pricing in the Americas co-operative framework.

 

THE UK’S ELECTRICITY GENERATION MIX

Electricity generation in the UK in 2017 was broadly stable compared with the previous two years although final consumption fell slightly. Improving energy efficiency and overall warmer temperatures have seen demand drop since 2005.

There is a continued shift away from coal towards renewable generation. Low-carbon sources of electricity (renewables & nuclear) accounted for a record 50.1%, up from 45.6% the previous year.

Some of the key trends in the UK’s electricity generation mix:

  • The share of renewables’ generation increased to 29.3% from 24.5% in 2016. This was aided by higher average wind speeds and an increase in renewable capacity reaching 18.3 GW (derated to reflect intermittency), which accounts for 22% of generating capacity.
  • Total wind generation increased by more than a third to 50 TWh. Offshore wind generation provided 20.9 TWh, while onshore wind generation increased to 29.1 TWh.
  • Hydro generation rose by 9% due to slightly more capacity in 2017.
  • Generation from solar photovoltaics increased by 11%, to a record 11.5 TWh due to increased capacity.
  • Nuclear provided 20.8% of electricity generated in 2017, which was broadly consistent with 2016.
  • Coal-fired generation continued its decline, falling from 22% in 2015 to 9% in 2016 and now to 6.7% in 2017 as the carbon price made coal generation more expensive than gas.
  • Gas generation reduced to 40.4% from 42.3% in 2016, although this is still higher than gas generation in 2015.
  • The UK remained a net importer of electricity in 2017, with net imports contributing 4.2 per cent of electricity supply – this was slightly lower than the 5.0 per cent of supply in 2016. The UK has four interconnectors allowing trade with Europe, England-France (2 GW capacity), England-Netherlands (1 GW), Northern Ireland-Ireland (0.6 GW) and Wales-Ireland (0.5 GW).
  • Provisional BEIS estimates suggest that overall UK emissions fell by 12 million tonnes of carbon dioxide (MtCO2) (3.2 per cent) to 366.9 MtCO2 between 2016 and 2017, largely driven by changes in electricity generation.

 

TRENDS IN UK 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. 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 significant changes. Up to 40 GW of older power stations will come offline by 2030.

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 2017 supply 15% lower than that in 2005. Installed electricity generation capacity in the UK increased gradually between 1996 and 2016, from 73.6 GW to 103.6 GW. The total electricity generated from all generating companies was 336 TWh in 2017.

Coal recorded its highest level of generation for ten years in 2006 as nuclear station availability was reduced and due to high priced gas. Coal use trended downwards until 2010 when higher winter electricity demand resulted in an increase from coal, and rose again in 2012 due to high gas prices. Since then supply from coal has fallen each year due to plant closures and conversions, continuing in 2017 to reach a new record low of 21.4 TWh.

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 a 4.6% decrease in 2017 to 134 TWh. The main driver for the shift in generation between coal and gas was an increase in the carbon price floor in April 2015, from £9 to £18 per tonne of CO2, as coal generation produces more than double the carbon dioxide per GWh of electricity supplied compared to gas.

Supply from nuclear grew to a peak in 1998 before falling back, with capacity reduced from 13 GW in 1999 to 9.4 GW in 2017, as plants reach the end of their lifetime and maintenance outages reduced supply.

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 29% to reach 61 TWh. Renewables capacity has seen a significant increase, with installed capacity increasing to 40.6 GW in 2017.

Since 2010, a trend for decentralisation continues with plant closures and an increase in small-scale renewable capacity seeing the Major Power Producers proportion of total generating capacity steadily fall from 92% in 2010 to 87.3% in 2017. Domestic electricity generation by households with micro-generation units (such as solar photovoltaic panels) increased sharply since the Feed in Tariff (FiT) scheme was launched in April 2010, to reach 1,420 GWh, however, self-produced electricity still accounts for only 1.3% of domestic consumption.

 

UK ELECTRICITY GENERATION CAPACITY

Electricity generation capacity is the maximum power available to the UK at any one time. By derating renewable capacity to account for intermittency allows direct comparison with conventional fuels as detailed in the following table.

Data taken from the Digest of UK Energy Statistics 2018

Load factors are the ratio of how much electricity was generated as a proportion of the total generating capacity. The technologies with highest capacity do not necessarily have the highest share of generation, since this depends on the load factor. Within renewables, load factors can be heavily influenced by weather conditions such as wind speeds, rainfall and hours of sunshine. The load factor for all plants was 46.1%. Nuclear stations had the highest plant load factor at 77.4%, which was 0.8 percentage points lower than that in 2016 due to more maintenance outages. In comparison onshore wind had a load factor of 28%, offshore wind 38.9% and solar photovoltaics 10.7%.

 

FUTURE TRENDS IN ENERGY SUPPLY

The UK’s environmental policy and consumer trends are likely to lead towards greater decentralisation and decarbonisation. The increase in electric vehicles, air conditioning and the electrification of heat are anticipated to significantly increase demand for electricity. There were approximately 800,000 electric vehicles in the EU at the end of 2017. Projections indicate that current generation would need to increase by 10% to 30% to meet the demand created by electric vehicles.

The improving cost effectiveness of renewables are likely to increase their share of the UK’s energy mix and are projected to become the largest proportion of power to the grid within a 5 year timeline. If the current growth rate continues the EU will achieve a 50% electricity mix from renewables by 2030.

The potential for delays in the UK’s nuclear new build programme continue. While Hinkley Point C is nearly two years into a ten year construction programme, the nuclear plants at Wylfa Newydd in Wales and Moorside in Cumbria are still looking to put the required funding in place and agree a strike price with the government before making a final investment decision. The National Infrastructure Commission has recently made a recommendation that the government should “Not agree support for more than one nuclear power station beyond Hinkley Point C, before 2025” which may see only one more plant being supported. The development of small modular nuclear reactors is being given some financial support by the government.

Other trends include:

  • An increase in gas imports. Fracking for shale gas continues to receive support from the government.
  • A National Grid report projects battery storage capacity reaching at least 2.1GW by 2025.
  • Additional interconnectors will increase the capacity to import / export power.
  • Innovation in heating and transportation could lead to greater usage of hydrogen, the provision of district heating schemes and carbon capture utilisation and storage (CCUS) for gas generation.

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

A2O People are a member of the Hinkley Point C Professional Services Group established to support the UK Nuclear Supply Chain. We have developed a Guide for Job Seekers for people interested in working in the nuclear sector and a Supply Chain Guide e-book for companies interested in working on the UK Nuclear New Build projects..

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