UK Energy Part 2: 2005 Quarter 2 Update
Two interesting reports have been published recently, Energy Trends from the DTI updated with 2005 Quarter 2 data and Winter Outlook Report 2005/06 from Ofgem. These two reports contain a wealth of data on the UK energy market past, present and looking forward to the winter. However I am less impressed with the analysis and conclusions drawn from the data. This is part two of the article and discusses the Energy Trends report, in part one I discussed the Winter Outlook Report here: UK Energy Part 1: The Winter Outlook.
The report covers energy as a whole and by individual fuel types. These are some of the main points for the second quarter of 2005.
- Total energy production was 7½ per cent lower than in the second quarter of 2004.
- Oil production fell by 10 per cent compared to the second quarter of 2004 as production from older established fields continued to decline.
- Gas production was 5½ per cent lower compared with the second quarter of 2004. Gas imports increased by 53½ per cent while gas exports declined by 26½ per cent. The UK was a net exporter of gas in the second quarter of 2005, albeit 74½ per cent lower than in 2004. Gas demand was 2 per cent higher than a year earlier.
- Coal production was 20 per cent lower than a year earlier. Coal imports were 20 per cent higher and at a new record level. Generators’ demand for coal was up 6½ per cent.
- Allowing for calendar differences, coal supplied ½ per cent more electricity than in the same period a year earlier, while gas supplied 4½ per cent less. Nuclear supplied ½ per cent more. Net imports of electricity were 20 per cent higher than a year earlier.
Is it clear from this overview that the UK is rapidly losing its energy island status, the shift in gas being particularly pronounced. Not only does this represent a real energy security problem moving forwards but also an economic problem as energy imports add to the countries trade deficit.
Coal
Coal production has fallen sharply with further deep mine closures and “continuing geological and operational difficulties” reducing production at other mines. This production decrease has been met with increased imports.
As we saw in UK Energy: The Winter Outlook reduced gas use for electricity generation is the key to managing gas shortages this winter. This drop in gas fired electricity will need to be met through increased coal burn however coal stocks do not look in a fit state to cater for significant increased coal fired electricity generation having fallen for the last three years.
Oil
The collapse of North Sea oil is no secret with extraction in the 2nd quarter 10.1% down on the year before. This decrease comes despite eight new fields coming into production.
Natural Gas
The extraction rate of natural gas is also in decline with a fall of 5.3% over the year ending quarter two 2005. The report comments that this trend is likely to continue and become more apparent during the winter months when demand increases.
To illustrate how significant a period we are in regarding gas supplies we only have to look at how imports and exports have shifted over just one year. Imports have risen by 53.6% whilst exports fell by 26.3%. During the last quarter imports accounted for 11.3%, up from 7.6% in 2004.
Energy Island
Until very recently the UK was an energy island, self sufficient in energy. This situation is changing rapidly. Domestic gas, oil and coal extraction rates are all crashing and the nuclear fleet is ageing, soon to be decommissioned. Whilst not impossible to sustain a successful economy and high standard of living on imported energy (see Japan). The rate of change could be devastating to the UK, both in terms of reduced security of supply and the negative effect on the trade deficit.
This post was written by Chris Vernon
This entry was posted on Sunday, October 9th, 2005 at 6:47 pm and is filed under Hydrocarbon Depletion, Economy, Electricity. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
October 10th, 2005 at 11:37 am
Excellent analysis. This really is back of an envelope stuff really with the conculsions and trends so self -evident that you have to be really dumb not to understand what is happening in the UK.
I bang on about it at my site and started FCUKEDD Forthcoming United Kingdom Energy Debt Disaster 3 years ago…when the White Paper was published.
I will link this and intende to copy your intro on a piece I have posted today re the secret negotiations with EU energy cartel.
October 13th, 2005 at 8:44 am
Chris,
This is is an excellent post. I’ve been looking for a UK site with this kind of detailed information and analysis for some time. I think we know what some of the headlines will be this winter. I look forward to further postings
October 14th, 2005 at 2:54 pm
Thanks for analyzing the data - we truly are in a very serious position. The Sunday times reports we have 11 days gas stocks compared to Euorpe’s 55. We are in a colder climate, we need heating to survive the winters, the North Sea oil and gas are in decline by as much as 8% a year (the Independent, article in June?) and this decline is only likely to continue.
There is no bright side. We can’t rely on Norway and LNG imports forever either. One day all fields will be in decline and Norway needs gas for heating and electricity just like we do.
Offshore wind is about the only serious proposition of replacing a lot of electrical generation - and we need a Marshall Plan sized project to stick them wind towers allover our offshore coastline. Urgently!!!
November 16th, 2005 at 11:33 pm
[…] reactors down for maintenance in 2004 that are operating again now. I quoted this graph a few weeks ago from the DTI Energy Trends publication, it can now be updated with the latest data. Tha […]
March 3rd, 2007 at 6:39 am
Welcome to our website for you World of Warcraft Gold,Wow Gold,Cheap World of Warcraft Gold,cheap wow gold,buy cheap wow gold,real wow gold,sell wow gold, …
Here wow gold of 1000 gold at $68.99-$80.99 ,World Of Warcraft Gold,buy wow gold,sell world of warcraft gold(wow gold),buy euro gold wow Cheap wow gold,cheapest wow gold store … ffxi gil buy euro gold wow wow gold–buy cheap wow gold,sell wow gold.welcome to buy cheap wow gold–cheap, easy, wow gold purchasing.World of Warcraft,wow gold Super …
We can have your wow gold,buy wow gold,wow gold game,world of warcraft gold, wow Gold Cheap wow, Cheap wow gold,world of warcraft gold deal,Cheap WOW Gold …
Welcome to our website for you World of Warcraft Gold,Wow Gold,Cheap World of Warcraft Gold,wow gold,buy cheap wow gold,real wow gold,sell wow gold, …
Here wow gold of 1000 gold at $68.99-$80.99,World Of Warcraft Gold,buy wow gold,sell world of warcraft gold(wow gold),buy gold wow lightninghoof instock Cheap wow gold,cheapest wow gold store …
ffxi gil wow gold–buy cheap wow gold,sell wow gold.welcome to buy cheap wow gold–cheap, easy, wow gold purchasing.World of Warcraft,wow gold Super …
Wow gold- Gold for buy gold wow lightninghoof instock EU-Server: …wow Gold EU: starting from 84,99?; 3000 WoW Gold EU: starting from 119,99?. wow Gold- Leveling Services: …
We can have your wow Gold,buy wow Gold,wow Gold game,wow gold, Cheap wow Gold, Cheap World of Warcraft Gold,world of warcraft gold deal,buy cheap wow gold,Cheap WOW Gold …
Here wow Gold of 1000 gold at $68.99-$80.99,World Of Warcraft Gold,buy wow Gold,sell world of warcraft gold(wow gold),Cheap wow gold,cheapest World of Warcraft Gold store …
November 13th, 2008 at 9:10 am
m4ac0hgoul956vfq