Providing for the UK’s Energy Needs

Primary Energy Demand

Oil and gas together met three quarters of primary energy demand in 2005² and demand is forecast to increase significantly by 2020. Under the DTI ‘favourable to coal’ scenario described within the Energy Review, oil and gas together will contribute 78% of primary energy demand, under the ‘favourable to gas’ scenario demand will rise to 83%. Both scenarios are based on February 2006 investment plans for nuclear and coal and the same assumption about the shutdown rates of power stations fired by these fuels. The difference between the two scenarios is the extent of fuel-switching between gas and coal from 2006 onwards as a result of price differentials.

In the ‘favourable to gas’ scenario, lower general prices mean the gas price is cheaper relative to coal, which triggers more gas use in generation relative to coal (i.e. it is the difference between coal and gas prices that is important rather than the absolute levels). The environmental impact of lower general prices triggering higher total energy demand is slightly higher emissions than in the ‘favourable to coal’ scenario.

Figure 13: UK Primary Energy Demand 1970-2020

In contrast to oil and gas, the contribution of coal to primary energy demand falls from 17% in 2005 to 10-14% in 2020 dependent on the scenario considered. Given current investment plans in nuclear plants, the contribution of nuclear to primary energy demand falls from 8% in 2005 to only 3% in 2020. While the share of renewables doubles between 2005 and 2020, it grows from such a small base that its ability to satisfy primary energy demand still only stands at 4% in 15 years’ time.

² DTI ‘UK Energy and CO₂ Emissions Projections’ published Feb. 2006. Back