UK’s transition to net zero stalls amid surge in gas generation
Today’s energy production, trade, electricity generation and consumption statistics show that primary energy consumption in the UK on a fuel input basis fell by 4.9%. Indigenous energy production fell by 2.3%.
Electricity generation by Major Power Producers was down 3.7%, with gas up 14%, but nuclear and renewables were down 12% and 11% respectively. Low carbon share of electricity generation by Major Power Producers fell to 62.9%, whilst fossil fuel share increased 4.3% to 35.2%.
Sheena McGuinness, Co-Head of Energy and Natural Resources at RSM UK, said: “Whilst there is a global trend of shifting towards nuclear energy, as replicated in recent government activity in the UK with the approval of Sizewell C to deliver clean power and drive economic growth, it is surprising to see that nuclear energy generation fell by 12%. The global shift towards nuclear is a long-term ambition, so it will take longer for the relative market increase to be reflected in the energy mix. The current fluctuation is therefore more likely to be attributable to the increasing reliance on gas in the short term.
“The decline in renewable energy generation could also stem from several factors. One possibility is that the energy market is becoming more fragmented; however this seems unlikely given the dominance of major players. Another explanation could be a change in energy sourcing, with a growing reliance on imported electricity and gas energy imports, rather than domestic renewable production. Additionally, the Big Six may be adjusting their strategic focus on mechanisms such as Power Purchase Agreements (PPAs), which may not immediately translate into higher domestic renewable output. On a global level, gas utilisation is rising, so the relative share of renewables will therefore decrease. This implies that the UK energy sector is following broader international trends.”
She added: “The fluctuations in energy production reveal the complexity of the UK’s energy transition and the pressure facing businesses to adapt their strategies, reduce reliance on imports and become more sustainable. While the government’s Industrial Strategy set out long-term policy and investment commitments to achieve net zero, short term clarity is needed on the viability and competitiveness of domestic energy sources.”