The energy situation in the UK has undergone a marked change in the past decades.
In the late 1970s, the development of North Sea oil and gas, coupled with investment in nuclear generation, meant that energy in the UK was cheap during a period of stability in the international market. The UK benefited from an energy supply that was steady and affordably priced.
In the 1980s, government and industry inherited not only North Sea oil and gas, but also an extensive generation and distribution infrastructure, developed when electricity and gas were nationalised industries. De-industrialisation and improved energy efficiency gave the UK spare capacity. This allowed the sector to focus on 'sweating' existing assets harder to drive down prices for consumers.
The current situation
Recent times have seen a radical change in the way we view our energy security.
- the price of oil and gas has seen extreme fluctations
- UK North Sea reserves are rapidly declining
- the UK has little storage capacity for oil and gas
- the UK is exposed to unstable international energy markets
- no new nuclear power stations are expected before 2018
In addition we face a new challenge - climate change. Scientists claim that unless we make deep inroads into our carbon emissions, we are likely to see adverse climate change with severe impacts on coastal communities, food supplies and the number of species in the world. The Stern Review in 2006 identified that failure to reduce greenhouse gas emissions would lead to a reduction in global ouput. The UK government set an ambitious target of cutting CO2 emissions by 80% by 2050.
This means the UK energy sector has to deliver a more complex set of outcomes:
- reducing CO2 and greenhouse gas emissions
- creating sustainable energy that improves quality of life
- ensuring energy supply is secure and affordable
Further information on the current state of the UK energy sector can be found in ICE's Energy briefing paper.
The ICE Policy team
The policy team develops scenarios and probes government policy to establish how the energy sector could be affected and how the industry can improve the way it delivers services and meet the challenges that we face.