Energy policy of the United Kingdom facts for kids

Primary energy mix in the UK, 1970 to 2017. This shows how the country has used different energy sources over time.

The energy policy of the United Kingdom is all about how the UK manages its energy. This includes making sure everyone has enough energy, that it's affordable, and that it's used wisely. The UK also wants to reduce its carbon dioxide emissions to help fight climate change.

Historically, the UK has been good at encouraging public transport. This helps reduce the need for many short flights. However, the policy hasn't pushed for hybrid vehicles or ethanol fuel as much. These could help lower how much fuel cars use. For renewable energy, the UK has big plans for wind and tidal energy. In 2007, the government aimed for 20% of the UK's energy to come from renewable sources by 2020.

Today, the Department for Energy Security and Net Zero (DESNZ) is in charge of energy policy. This department was created in 2023. The Office of Gas and Electricity Markets (Ofgem) makes sure energy markets are fair. Since the 1980s, when energy companies became private, the government has focused on managing energy prices, reducing carbon, rolling out smart meters, and making buildings more energy efficient.

UK Energy Goals and Challenges

The UK government has set out clear goals for its energy policy. These goals help guide how the country produces and uses energy.

• To cut carbon dioxide emissions by 60% by 2050, with good progress by 2020.
• To keep energy supplies reliable. This means making sure there's always enough energy.
• To encourage fair competition in energy markets. This helps the economy grow and makes things better.
• To make sure every home can be heated properly and affordably.

Energy policy covers many things. This includes how electricity is made and sent out, how much fuel transport uses, and how homes are heated. The UK faces two main challenges:

• Dealing with climate change by reducing carbon dioxide.
• Making sure there's secure, clean, and affordable energy. The UK is becoming more reliant on imported fuel.

The UK will need many new power stations in the next 20 years. This is because old coal and nuclear power stations are closing down. In 2006, the idea of building new nuclear power stations came back. After some legal challenges, the government decided in 2008 that new nuclear power stations were important. They would help with climate change and energy security.

In 2008, the Department of Energy and Climate Change was created. It brought together energy policy and climate change efforts.

Scotland's Energy Approach

Even though the UK government handles most energy policy, the Scottish Government has its own energy policy. This policy is different from the UK's. Scotland also has the power to put some of its energy ideas into action.

How Energy Markets Work

In 2006, the UK's total energy market was worth about £130.73 billion. Transport used the most energy outside of the energy sector itself.

The UK is planning big changes to its electricity market. These changes include new ways to pay for electricity and ensure there's enough supply in the future.

Main Energy Sources for Electricity

The decommissioned Dounreay nuclear power complex.

The UK used to rely a lot on nuclear power and natural gas from its own North Sea reserves. Now, it's becoming a country that imports more energy than it produces.

In 2011, here's where the UK's electricity came from:

• Natural gas: 41%
• Coal: 29%
• Nuclear: 18%
• Renewables: 12%
• Other: 2%.

Coal Power is Decreasing

In November 2015, the UK government announced that all coal power stations would close by 2025. Many have already shut down or changed to use other fuels like biomass.

In May 2016, for the first time, solar power made more electricity than coal. On April 21, 2017, the UK went a full 24 hours without using any coal power. This was the first time since the 1800s! By 2018, coal provided only 5.4% of the UK's electricity. This is a huge drop from 30% in 2014.

Natural Gas Use

In the 1980s and early 1990s, there was a big increase in gas-fired power plants. This was called the "Dash for Gas." Gas plants were quick to build, which was good when interest rates were high.

However, natural gas will likely play a smaller role in the UK's energy future. Production from the North Sea gas fields is decreasing. While the UK has invested in pipelines to import gas, mostly from Norway, it doesn't want to rely too much on other countries for its energy.

By 2021, North Sea oil and gas production was expected to drop significantly. In November 2015, a new "dash for gas" was announced. This was to fill the gap as coal power stations close and new nuclear ones are delayed.

Nuclear Power

After the UK government decided to support new nuclear power stations in 2008, companies like EDF planned to open new plants. However, the Scottish Government is against building more nuclear power stations in Scotland.

Renewable Energy

Since the mid-1990s, renewable energy has started to provide more electricity in the UK. This added to the small amount of hydroelectricity already being generated. By 2009, renewables provided 6.7% of the UK's electricity, rising to 11.3% in 2012.

By mid-2011, wind power in the United Kingdom had grown a lot. The UK was the world's eighth largest producer of wind power. Wind power is expected to keep growing in the UK. It is the second largest source of renewable energy after biomass.

Since 2020, large batteries have been built to store energy. This helps when wind and solar power change. By May 2021, 1.3 GW of battery storage was active. This is in addition to traditional pumped storage power stations.

Where Energy is Used

See main article Energy use and conservation in the United Kingdom

In 2005, here's roughly how the UK used its energy:

• Transport: 35%
• Space heating: 26%
• Industry: 10%
• Water heating: 8%
• Lighting/small electrics: 6%

People are using more fuel because they are more mobile and have more money. Fuel use went up by 10% in the decade leading up to 2000. This trend might slow down as more efficient diesel and hybrid vehicles are used.

Heating homes and water uses a lot of energy in the UK. This is more than in warmer places like the US or southern Europe. The UK has rules to encourage energy conservation in buildings. For example, new buildings must meet certain energy efficiency standards.

Since June 2007, buildings in England and Wales need an Energy Performance Certificate (EPC) before they are sold or rented. This shows how energy efficient a building is.

How Energy Policy Has Changed

From State Control to Free Markets (1980s-2000s)

In the 1980s and 1990s, the government changed energy companies from state-controlled to private. This meant the government no longer directly controlled energy markets. Now, Ofgem regulates the market. The government influences it through taxes, grants, and rules.

In 1999, all UK households could choose their gas or electricity supplier. This was meant to create competition. Many people switched suppliers to save money. By the mid-2000s, a few large companies, known as the "Big Six," dominated the market.

The Warm Homes and Energy Conservation Act 2000 aimed to end "fuel poverty" by 2016. Fuel poverty means a household spends more than 10% of its income on heating.

In 2008, Ofgem looked into competition in the energy market. It found things that made competition weaker but no evidence of a cartel (companies secretly working together).

Energy Price Caps (2010 to Present)

The Energy Act 2010 introduced the Warm Home Discount scheme in 2011. This helps low-income families with their energy bills.

Ofgem also found that energy prices were too complex for consumers. Many people were on more expensive "standard" tariffs. Energy prices also went up faster than they came down. New suppliers found it hard to enter the market. Ofgem proposed changes to make pricing clearer and help new suppliers compete.

In 2013, the government gave Ofgem more powers. In 2014, the government aimed to improve fuel-poor homes to a good energy efficiency rating by 2030.

In 2013, Ed Miliband, then Labour leader, proposed freezing energy bills. This was popular with the public but criticized by energy companies. By the end of the year, the government knew people were unhappy about energy companies overcharging.

In 2014, Ofgem asked the Competition and Markets Authority (CMA) to investigate the energy market. In 2015, the CMA said energy suppliers were overcharging customers by a lot. They proposed a price cap for customers using prepayment meters.

In 2017, Prime Minister Theresa May promised to put a price cap on energy bills. This was to help families save money. The law for this, the Domestic Gas and Electricity (Tariff Cap) Bill 2018, was passed in July 2018.

The "default tariff price cap" came into force on January 1, 2019. It meant energy suppliers couldn't charge more than a certain amount for a typical household. The cap changes based on wholesale energy costs, network costs, policy costs, and other factors. Ofgem reviews the cap every few months.

In the 2020s, several energy suppliers went out of business. In August 2022, Ofgem decided to review the price cap every three months because wholesale prices were changing so much.

Government Help with Energy Bills (2022–23)

Because energy prices went up a lot in 2022, the government announced ways to help families. This included a £400 discount on energy bills. Other help included payments for households on benefits, pensioners, and people with disabilities.

In September 2022, Prime Minister Liz Truss announced an "Energy Price Guarantee." This would limit typical household energy costs to £2,500 per year by giving money to energy suppliers. This support was later changed to last until April 2023, then extended again until June 2023.

Reducing Carbon Emissions

Climate Change Becomes a Priority (Early 2000s)

In 2005, a report by Nicholas Stern said that climate change was the "greatest market failure ever seen." This made climate change a bigger focus for the government.

The UK joined over 170 other countries in promising to reduce carbon dioxide emissions. In 2003, the UK produced 4% of the world's greenhouse gases. The long-term goal is to cut carbon emissions by 80% by 2050.

Rules were put in place to reduce emissions from road transport. However, aviation fuel is not covered by international agreements. This means that if the UK cuts other emissions, aviation could cause a large share of the UK's greenhouse gases by 2030.

Energy White Paper (2003)

In 2003, the UK government published its energy plan, "Our Energy Future – creating a Low Carbon Economy." This was the first formal energy policy in 20 years. It said that reducing carbon dioxide (CO₂) was necessary. It aimed for a 60% cut in emissions by 2050. The plan focused on "cleaner, smarter energy" and had four main ideas: environment, reliable energy, affordable energy, and competitive markets.

Energy Review (2006)

In 2006, the UK government reviewed its energy policy again. This was because the world energy situation was changing fast. The UK was becoming more dependent on imported oil and gas. There were also growing worries about carbon emissions.

The review confirmed the government's four main goals for energy policy:

• Cut carbon dioxide emissions by 60% by 2050.
• Keep energy supplies reliable.
• Promote fair markets.
• Ensure every home is heated affordably.

It also highlighted two big challenges:

• Dealing with climate change.
• Providing secure, clean, and affordable energy as the UK imports more.

The review suggested actions in three areas:

• Saving Energy: This means using less energy in homes and businesses. Ideas included giving more information to people, setting higher standards for energy efficiency, and making government buildings carbon neutral.
• Cleaner Energy: This means making the energy we use less polluting. Ideas included using more local energy generation, supporting carbon pricing, and encouraging renewable energy. It also looked at new nuclear power and carbon capture and storage.
• Energy Security: This means making sure the UK has enough energy supplies. The main challenges are relying more on imported oil and gas, and ensuring enough investment in power stations. The government's plan is to keep markets open and work with other countries.

The review also discussed nuclear power. It said the government would let private companies build new nuclear stations.

Energy White Paper (2007)

The 2007 energy white paper, "Meeting the Energy Challenge," continued to focus on two main challenges:

• Cutting carbon emissions to fight global warming.
• Ensuring secure, clean, and affordable energy as North Sea oil and gas production decreases.

The paper expected the UK to need 30–35 GW of new electricity generation within 20 years. This is to make up for increased demand and closing power plants. It also noted that renewable energy might only reach 5% of consumption by 2020, much less than the 20% target.

The proposed strategy had six parts:

• Creating international rules to fight climate change.
• Setting legal carbon targets for the UK.
• Making energy markets more competitive.
• Encouraging more energy saving.
• Supporting low carbon technologies.

Practical steps included:

• For businesses: A new scheme to limit carbon, energy certificates for buildings, and smart meters.
• For homes: New homes to be zero-carbon by 2016, improving old homes, and making appliances more efficient.
• For transport: New plans for low-carbon transport and including aviation in carbon trading schemes.

For energy supply, the plan suggested:

• Expanding biomass use.
• Supporting local electricity and heat generation.
• Aiming for 10% renewable electricity by 2010 and 20% by 2020.
• Supporting carbon capture and storage.
• Allowing private companies to invest in new nuclear power stations.
• Using biofuels for 5% of transport fuel by 2010–2011.
• Helping to get the last oil and gas from the North Sea.
• Making it easier to get permission to build new energy infrastructure.

Climate Change Act (2008)

In 2008, the Climate Change Bill became law. This was a big step. It set a legal goal for the UK to cut its carbon emissions by 80% by 2050 (compared to 1990 levels). It also set an in-between target of 26% to 32% by 2020. The UK was the first country to set such a strong, long-term carbon reduction target into law.

The Committee on Climate Change was set up in December 2008 to oversee this. In April 2009, the government aimed for a 34% cut in emissions by 2020.

UK Low Carbon Transition Plan (2009)

Published in 2009, this plan detailed how the UK would cut carbon emissions by 34% by 2020. It aimed for:

• Over 1.2 million "green jobs."
• 7 million homes to be more energy efficient, with 1.5 million making renewable energy.
• 40% of electricity from low-carbon sources (renewables, nuclear, clean coal).
• Gas imports to be 50% lower.
• New cars to emit 40% less carbon.

Energy Bill (2012–2013)

The Energy Bill 2012–2013 aimed to close coal power stations and reduce reliance on fossil fuels. It also offered financial help to reduce energy use. The bill made it easier to build new nuclear power stations. Government targets were to get 30% of electricity from renewables by 2020. It also aimed to cut greenhouse gas emissions by 50% by 2025 and 80% by 2050 (compared to 1990 levels).

Energy White Paper (2020)

The 2020 energy white paper set a goal for the UK to reach "net zero" carbon emissions by 2050. This means removing as much carbon from the atmosphere as is put in.

The UK government plans to do this by:

• Investing a lot in renewable energy, aiming for 40GW of offshore wind power by 2030.
• Getting a big nuclear project ready for investment.
• Increasing the number of electric heat pumps installed in homes.
• Supporting carbon capture and storage (CCUS).
• Creating a new UK emissions system.
• Discussing whether to stop connecting new homes to the gas grid.

Renewable Energy Targets

The UK has set increasing targets for renewable energy. The first targets were 5% by 2003 and 10% by 2010. The goal was increased to 15% by 2015 and then 20% by 2020.

The 2009 Low Carbon Transition Plan aimed for 30% of electricity, 12% of heat, and 10% of transport fuels to come from renewable sources by 2020.

Scotland has an even more ambitious goal: to generate 100% of its electricity from renewables by 2020. Renewables in Scotland count towards both Scottish and UK targets.

While renewable energy hasn't always been a big part of the UK's energy mix, there's a lot of potential for tidal power and wind energy. The Renewables Obligation helps support renewable electricity sources with subsidies. Other grants also help less common renewables. Renewables are also exempt from the Climate Change Levy, a tax on other energy sources.

In 2004, 250 megawatts of renewable generation were added, and 500 megawatts in 2005. There are also programs for micro-generation (small-scale energy production) and solar power. Countries like Germany and Japan have much larger solar power programs than the UK. Hydroelectric energy is not a big option for most of the UK due to its flat land and smaller rivers.

Biofuels

The government aimed for 5% of transport fuel to come from renewable sources like ethanol or biofuel by 2010. This was part of the Renewable Transport Fuel Obligation.

In 2005, British Sugar announced it would build the UK's first ethanol biofuel plant. It would use British-grown sugar beet. The plant in Norfolk was set to produce 55,000 metric tonnes of ethanol each year. Some argue that even using all of the UK's spare land for biofuel crops would only provide a small amount of the transport fuel needed.

Fuel Poverty

One of the UK's main energy policy goals is to reduce fuel poverty. This means helping households that spend over 10% of their income on heating. Good progress has been made, mostly through government help for low-income families. Programs like Winter Fuel Payment, Child Tax Credit, and Pension Credit have been very helpful. Schemes like Warm Front in England and Home Energy Efficiency in Wales also help by offering money for insulation and other home improvements.

Public Opinion on Energy

People in the UK generally support renewable energy. This is mainly because they are worried about climate change and relying too much on fossil fuels.

A 2013 survey found:

• 74% of people were concerned about climate change.
• 82% were worried about the UK relying too much on energy from other countries.
• 79% wanted to see less use of fossil fuels in the future.
• 81% wanted to use less energy themselves.
• 85% supported solar energy.
• 75% supported wind energy.
• Many people didn't know about carbon capture and storage (CCS). When they learned more, they were concerned.
• People were unsure about the future of nuclear power. Over half (54%) would not want a new nuclear power station built near them.
• A majority (53%) were willing to use electric vehicles. This rose to 75% if the cars performed as well as regular ones.

Another survey in 2007 showed similar results:

• 81% were concerned about climate change.
• 79% thought the government should do more about global warming.
• 73% thought the UK relied too much on fossil fuels.
• 87% thought at least 25% of electricity should come from renewable sources.
• 56% were concerned about nuclear power.

Images for kids

• 

  Primary energy mix in the UK, 1970 to 2017. This shows how the country has used different energy sources over time.

• 

  The decommissioned Dounreay nuclear power complex.

See also