How much energy does the UK consume by each energy end-use sector?
Contribution to the UK economy.........
The contribution to the UK economy by the energy industries peaked in 1982 at 10.4%. In 2020, the contribution by the energy industries to the UK economy was 2.1% of GVA, 0.3 percentage points lower than in 2019. Despite its significant fall in 1986, oil and gas extraction has been the major energy contributor to the UK economy (with its value dependent both on production and the price of oil and gas) up until 2014 before falling below that of the electricity sector. In 2020, production and prices both fell due to the impact on supply and demand of the Covid-19 pandemic, however the oil and gas sector remained the second largest contributor. Of the energy total in 2020 electricity (including renewables) accounted for 56%, oil and gas extraction accounted for 27%, and gas accounted for 11%.
Employment in the energy production and supply industries fell rapidly throughout the 1980s and mid-1990s largely as a result of closures of coal mines. Between 1995 and mid2000s employment declined more slowly but since 2006 it has increased gradually, driven largely by growth in the electricity and gas sectors. In 2020 employment in the energy industries rose by 2.3% on the previous year to 181,000 which was 66% above the 2005 level and accounted for 6.4% of all industrial employment.
In 2020 investment in the energy industries at £15.0 billion (at current prices) was 23% lower than in 2019, and at the lowest level since 2010 due to the impact of the Covid-19 pandemic. Of the total invested electricity contributed 66% (up 10 percentage points on 2019), oil and gas extraction (including a small proportion of less than 0.01% for coal extraction) contributed 18% (down 12 percentage points on 2019), gas contributed 13% (up 2 percentage points on 2019), with the remaining 4% in coke & refined petroleum products industries (unchanged from 2019)
Total production of primary fuels, when expressed in terms of their energy content, fell by 3.1% in 2020 compared to 2019. Growth in renewable sources (bioenergy & waste, wind, solar & hydro) was offset by reduced fossil fuel and nuclear output, due to delayed North Sea maintenance activities caused by the Covid-19 pandemic, and numerous outages at UK nuclear power stations. Coal production fell to a record low level in 2020. Primary oil (crude oil and Natural Gas Liquids) accounted for 43% of total production, natural gas 30%, primary electricity (consisting of nuclear, wind, solar and natural flow hydro) 15%, bioenergy and waste 10%, while coal accounted for the remaining 1%. Total production increased rapidly between 1990 and 2000, mainly due to the growth of oil and gas. Production in 2000 was at record levels for natural gas, whilst in 1999 it was at record levels for overall energy and petroleum. Production has since been on a general decline, however production levels have increased since 2014 until the fall in 2019, as new oil fields have opened, combined with the growth in output from bioenergy and waste and the increased capacity of wind and solar technologies. Production is now 58% lower than its peak in 1999. Since 2000, oil and gas production together have fallen by an average of 5.1% per year.
Total final energy consumption (excluding non-energy use) was 13% lower in 2020 compared to 2019 due to the impact of the Covid-19 pandemic. It rose by 2.3% in the domestic sector due to increased home working, but fell by 5.6% in the service sector, by 6.2% in the industry sector and by 29% in the transport sector. The falls in the service and industry sectors were due to factories, shops, offices and schools all being forced to close during lockdown, whilst the large fall in the transport sector was due to the travel restrictions imposed with air consumption down by 60% due to the closure of international travel corridors, and road consumption down by 18%. Overall final energy consumption, when adjusted for temperature, was down by 11%, in 2020. In terms of fuel types, final consumption of gas, the main fuel used for heating, fell by 2%. Oil use also fell by 26%, whilst electricity consumption fell by 5%, however there was increased use of bioenergy in all sectors except transport.
In 2020 the UK obtained 21.5% of its primary energy from low carbon sources, with 37% of this from bioenergy, 31% from nuclear, and 18% from wind. Energy supply from biofuels increased by 3.9%, whilst solar was up by 4.4% reflecting increased capacity. The supply of nuclear fell by 11% due to numerous outages at all 8 of the UK’s power stations during 2020. Energy supply from wind increased by 18% in 2020, with capacity up by 2.5% and with wind speeds 0.8 knots higher than in 2019. Ten named storms affected the UK during 2020 which resulted in 2020 being the windiest year since 2015.
In 2019 UK territorial greenhouse gas emissions were estimated to be 454.8 million tonnes of carbon dioxide equivalent (MtCO2e), 44% lower than in 1990. The transport sector was the largest single source of GHG emissions in 2019, accounting for 27% of total emissions. Between 1990 and 2019, emissions from this sector decreased by 5%. In 2019 GHG emissions from the energy supply sector accounted for 21% of emissions and have decreased by 66% since 1990 due to changes in the electricity mix. Emissions from the residential sector accounted for around 15% of emissions in 2019; and since 1990 emissions from this sector have decreased by 14%.
In the long term, demand for oil products has been in decline since 1990 and the mix of products consumed has changed dramatically. In 2020 this demand has fallen to a near record low following the demand destruction caused by the Covid-19 pandemic. Whilst transport demand has fallen 29 per cent on 2019 transports share of total oil demand remains more than 70 per cent. Transport’s share of total oil demand is substantially larger than in 1990 because the use of fuel oil for electricity generation has declined and typically, as seen in 2019, air travel has become more common. However, whilst demand for all transport fuels fell in 2020 it was jet fuel that fell the most, down 60 per cent on 2019, as international travel restrictions were put in place to curb the spread of Covid-19.
Since the early 1990s there has been a marked trend of increasing demand for diesel and reducing demand for petrol, with demand levels inverting by 2018. This was caused by the increased use of diesel-fuelled cars and diesel for Light Goods Vehicles (LGVs). However, diesel demand started to decline in 2018 and continued in 2019 following increases to the tax rates charged for diesel vehicles. In 2020 this fall in diesel demand has been exacerbated by the Covid-19 pandemic and resultant restrictions on travel. Total diesel consumption fell to 19.7 million tones and petrol fell to 9.1 million tones, meaning demand for road fuels was down 19 per cent on 2019. The fall in demand for diesel was less that that seen for petrol, down 17 per cent, as commercial motor fleets (light and heavy goods vehicles) continued to operate during periods of restricted travel. Whereas petrol demand comes primarily from cars and taxis, and with restrictions in place on discretionary travel demand fell 22 per cent. Demand for buses and coaches in 2020 remained below 1 million tones for the second consecutive year.
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 marked features, but none of these fuels have followed a smooth path. Coal recorded its highest level for ten years in 2006 as nuclear station availability was reduced and as a substitute for high priced gas. Coal use trended downwards until 2010 when higher winter electricity demand resulted in an increase from coal, then rose in 2012 due to high gas prices. Subsequently, supply from coal has fallen each year due to plant closures and conversions, this trend continued in 2020 with coal generation reaching a new record low of 5.2 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 decreases in 2017 and 2018. From 2019 to 2020, supply from gas decreased by 16% to 109.3 TWh due to the fall in electricity demand during the Covid-19 pandemic. Supply from nuclear grew to a peak in 1998 before falling back, particularly during 2006 to 2008, as station closures and maintenance outages reduced supply, but recovered in 2009 before falling in 2010 due to further outages. Nuclear supply has fluctuated since 2010; although a decrease has been seen over the last four years. Nuclear supply dropped 11% from 2019 to 2020, to 45.7 TWh. Supply from wind and solar has followed an upward trend since 2000 as generation capacity increased each year. From 2017, wind and solar supply have increased substantially due to increased capacity. In 2020, supply from wind and solar was up 16% on 2019 to 88.5 TWh due to favorable weather conditions as well as continued increased capacity. Total electricity supplied rose continuously from 1997 to reach a peak in 2005. It has subsequently fallen, reflecting lower demand due to improved energy efficiency as well as economic and weather factors with supply in 2020 22% lower than that in 2005.
Installed capacity for electricity generation in the UK increased gradually between 1996 and 2018, from 73.6 GW to 101.2 GW. In 2019 and 2020, total capacity fell following the closure of several large coal-fired plants, and the mix of plants shifted towards renewable different technologies. Overall, there has been a decline in conventional steam, outweighed initially by an increase in combined cycle gas turbines (CCGT) and more recently by an increase in renewables. CCGT capacity increased almost threefold over the period 1996-2012, from 12.7 GW to 35.5 GW. This figure fell over the following years before increasing again in 2016 - 2018 to 33.6 GW. In 2020, CCGT capacity was similar to the 2019 figure at 31.8 GW. Conventional steam capacity decreased between 2019 and 2020 to 10.8 GW. Nuclear capacity in 2020 was 8.1 GW. The decreased capacity compared to 2019 reflects the decision not to restart generation at Dungeness B after a prolonged outage. Renewables capacity has seen a significant increase, with an installed capacity in 2020 of 47.8 GW. This is more than 20 times the capacity in 1996. Most of the renewable technologies saw an increase in capacity between 2019 and 2020, with a particularly large increase in capacity for offshore wind (up 5 per cent).
In 2020, bioenergy accounted for about 61% of renewable energy sources used, with most of the remainder coming from wind (27%), solar (4.8%) and heat pumps / deep geothermal (4.5%). Of the 24.3 million tons of oil equivalent of primary energy use accounted for by renewables, 18.1 million tons were used to generate electricity, 4.5 million tons were used to generate heat, and 1.6 million tons was used for road transport. Renewable energy use grew by 6.7% between 2019 and 2020 and has increased almost tenfold on the 2000 total.
Electricity generated from renewable sources increased by 13% between 2019 and 2020 to a record 134.6 TWh. The large increase is mostly due to favourable weather conditions, as installed capacity grew only marginally. Total wind generation increased by 18% to a record 75.4 TWh thanks to exceptionally strong wind speeds; within this, offshore wind generation rose by over 27% to 40.7 TWh, surpassing onshore wind at 34.7 TWh. Wind generation was particularly high during Quarter 1 of 2020, when storms Clara and Dennis hit the UK. Average onshore wind speeds in 2020, at 9.1 knots, were 0.8 knots higher than in 2019. Hydro generation increased by 15% in 2020, largely due to an increase in average rainfall, which was up by 23% on 2019. Generation from solar PV increased by 4.6%, following a small increase in capacity and average sun hours (up 0.2 hours in 2020). Generation from bioenergy and waste (excluding landfill gas) increased by 6.3%. Renewable electricity accounted for a record 43.1% of electricity generated in the UK during 2020, more than 6 percentage points higher than in 2019. The map on page 34 shows installed wind capacity for onshore and offshore sites across the UK.
