June 18 Newsletter 14th June 2018
A Decade of Carbon Reduction
Ten years ago the Climate Change Act committed the UK to achieving an 80% reduction in carbon emissions. During this time, businesses around the UK have worked diligently to improve energy efficiency and generate low carbon energy.
The results of this nationwide effort have been substantial. Over the last decade, annual UK greenhouse gas emissions have dropped from 660 Mt CO2e (2007) to 456 Mt CO2e (2017). This is a reduction of over 31%.
The successful reduction of the UK’s carbon emissions has been driven in part by a tremendous increase in electricity generated from low carbon sources. Renewable electricity has more than quadrupled from 19.7 TWh in 2007 to 98.9 TWh in 2017 [DUKES], with the major contributors being onshore wind (29%), offshore wind (21%), PV (12%) and biomass plant (20%). If we include the nuclear contribution to electricity generation – this means 50% of electricity generated in 2017 was from low carbon sources.
Whilst generally overlooked, there has also been a dramatic improvement in energy efficiency, with energy use having fallen despite an increasing population. In 2007 the primary UK energy supply was 237 mtoe in comparison with 198.5 in 2017 [DUKES].
By contract, the population of the UK was 61.3m in 2007, and 66m in 2017 [ONS]. This means energy use has dropped from 3.9 to 3 toe/person – a 23% improvement in efficiency.
Unfortunately the global picture is less encouraging. In 2007, world annual CO2 emissions (from fossil fuels and industrial processes) were 31.9 GtCO2, and have since risen to 36.8 GtCO2 in 2017. By direct contrast, the UK’s achievement puts the nation amongst the leading countries in terms of transitioning to a low carbon economy.
Whilst there is still substantial work that needs to be undertaken to continue reducing carbon emissions, the results from the last ten years look positive. Briar Associates are proud to help our clients contribute to the reduction of carbon emissions in the UK with a range of energy efficiency and carbon management services. Contact us today to find out more about how we can help your business.
Current Market Position
The UK energy market continued May’s upward trend with rising oil prices, unplanned gas outages and elevated carbon prices.
The volatility of oil prices observed in April due to geopolitical risks, continued. The USA withdrew from the Iran nuclear agreement, causing supply concerns. Iranian exports are estimated to fall by a million barrels a day in 2019 in an already tight market as most of the supply glut has been eradicated by the OPEC production cuts. However, oil prices softened at the end of May as market analysts expect OPEC and Russia to agree on a production increase to cover supply shortfalls from Iran and Venezuela.
Several unplanned Norwegian gas outages restricted flows to the UK and high exports to the continent also supported prices since withdrawals from storage were needed to balance the gas system. Finally, low LNG deliveries to the UK reinforced the upward movement.
Power prices followed the gas trend and were pushed further by carbon prices reaching a seven-year high. Looking ahead, EDF’s nuclear power plant, Hunterston B, is expected to remain offline over the summer and in mid-June the UK-Belgium interconnector (IUK) will undergo two weeks of maintenance, disconnecting the UK gas system from continental hubs.