The UK has seen a 6% increase in electricity use since 1990. However, its energy production has decreased by over 40%, displaying a significant change in energy efficiency.
Electricity generation by source (1990-2019)
The way in which electricity is sourced in the UK in the last 30 years has shifted drastically: coal has dropped from 65% to just 5% while natural gas has grown from under 5% to around 40%. Nuclear usage has remained steady while maintaining a 20% share. Wind power has rapidly grown from virtually nothing with a current share of 20%; biofuels have seen a similar trajectory now exceeding a 10% share. Solar power is equally growing and reached 5% as of 2019.
Electricity consumption has not significantly changed since 1990 having grown slightly from 307 to 318 Terawatt hours (TWh) in 30 years. It did, however, rise periodically in the mid-2000s to 379 TWh. This usage highlights an overall increase in efficiency as per capita consumption has dropped slightly since 1990 in spite of a growing population and energy production has dropped by 20%.
Although primary energy supply (defined as energy production plus energy imports minus energy exports) has fallen since 1990, it still has not decreased as much as energy production. With a 75% rise in electricity imports in the last decade, exports have only slightly decreased resulting in a net importing share for the UK.
Residential, industrial, commercial, and public service sectors are the main drivers behind electricity consumption and policies targeting GHG emissions reduction have succeeded in gradually lowering the CO2 intensity of power since 1990 (with a sharper decline in the last 8 years alone).
Last month, the UK announced its 10-point plan for a UK Green Industrial Revolution. It aims to create over 250,000 green-collar jobs by 2050, mobilize £12 billion of new government investment (plus at least three times as much from private sector investment) by 2030, lead the G7 in ending the sale of new petrol and diesel cars by 2030, and establish a long-term strategic advantage in key emerging industries such as offshore wind and zero-emission vehicles.
Following the 10-point plan, last week the UK outlined its Nationally Determined Contribution (NDC) of reducing emissions by at least 68% by 2030 based on 1990 levels. This comes ahead of the Climate Ambition Summit on 12 December and the upcoming COP26 in Fall of 2021; it signals a higher level of ambition than the UK’s previous inclusion in the EU’s NDC under the Paris Agreement (with a target equivalent to a 53% reduction).
Following December’s Climate Ambition Summit, the UK released its Energy White Paper emphasizing just transition mechanisms and ensuring accessibility of energy for the wider public. The report iterates a strategy to cut emissions by 2030 from industry, transport, and buildings by 230 million metric tons—equivalent to 7.5 million petrol cars—as well as creating hundreds of thousands of new jobs in the clean energy sector. Key social elements in the Paper include supporting low-income households in maintaining low energy costs and protecting consumers by better controlling tariffs. These major announcements present key opportunities to revitalise both the country’s energy mix and the way that its electricity is produced.
The Public Sector Energy Efficiency Loan scheme provides interest free loans to public sector bodies to support installation of energy efficiency measures and thereby reduce energy consumption, greenhouse gas emissions, and energy bills so as to help meet Clean Growth Strategy targets and new NDC levels. So far, many institutions have participated in the scheme and achieved significant energy and cost savings. Furthermore, numerous public sectors report that this scheme encourages them to do more to enhance the energy efficiency of a work environment.
We recommend that the UK continue expanding its low-carbon energy supplies for electricity and increase energy efficiency. Their NDC can be partially met through ensuring a global leadership role in the offshore wind industry, scaling up hydrogen usage in critical industries, replacing boilers with renewable electricity, phasing out vehicles with internal combustion engines, and curbing the behaviour of consumers and companies. The UK Government’s promises regarding green investments must be directed towards novel policies in order to guide industry and the general public towards shifting production and demand away from carbon-intensive activities.
Kwasi Kwarteng, Minister of State for Business, Energy, and Clean Growth
Telephone: +44 (0) 20 7219 4017
Address: Kwasi Kwarteng MP, House of Commons, London, SW1A 0AA
This post was submitted by UK Country Managers Gwen Wren and Thomas Christensen
 A notable exception is the energy sector, which has been the focus of climate policy over the past few decades. For this sector we find evidence that firms with higher green revenues on average have higher profitability, and that this is also associated with better stock market performance.