Review of UK energy policies highlights challenge of revamping nation’s energy infrastructure and boosting energy efficiency
30 May 2012
As it seeks concrete solutions to the low-carbon investment challenge, the United Kingdom is leading by example, according to a review of UK energy policies published today by the International Energy Agency (IEA).
The report, Energy Policies of IEA Countries - United Kingdom 2012 Review, applauds the UK’s long-term vision for a low-carbon future – greenhouse gas emissions are to be reduced by 80% from 1990 to 2050 – and its achievements to date, but also sounds some notes of caution regarding the design and implementation of the policies. The review provides a number of recommendations for UK policymakers to consider.
"The United Kingdom consistently plays a constructive role in international climate policy, and its domestic policies enhance its credibility on the world stage," said IEA Executive Director Maria van der Hoeven as she presented the review. “For the United Kingdom to decarbonise its economy and energy system, however, huge private-sector investments in energy infrastructure are needed. Consumers must be certain that they are paying for the most cost-effective solutions. Enhanced co-operation with neighbouring countries will increase electricity security."
The proposed Electricity Market Reform is a pioneering effort that will be closely observed by other countries in their efforts to ensure continuing reliability of electricity systems while promoting timely decarbonisation of electricity supplies. One fifth of the country’s ageing power-generating capacity will have to be closed this decade.
The report says that, ideally, the complex and ambitious electricity market reform would in the long run lead to a more liberalised marketplace in which low-carbon power-generation technologies – including renewable and nuclear energy as well as carbon capture and storage – compete. A more liquid wholesale electricity market is needed for the reform to become a success.
“More efficient energy use is essential to both decarbonisation and energy security,” Ms. Van der Hoeven noted. The Green Deal programme, which the UK plans to launch later this year, aims to improve energy efficiency in buildings and public spaces. But for it to succeed, the general public must be sufficiently aware of its benefits.
A transition to a low-carbon economy will take time, and fossil fuels, in particular oil and natural gas, will remain important. The report therefore encourages the UK to maximise its remaining potential for oil and natural gas production as the low-carbon transition continues. Oil imports are well-diversified and oil stocks are very robust, while natural gas import capacity exceeds annual demand by a wide margin. Large investments in LNG capacity have increased the flexibility of gas supply. Another asset is the liquid, well-functioning wholesale natural gas market.
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About the IEA
The International Energy Agency (IEA) is an autonomous organisation which works to ensure reliable, affordable and clean energy for its 28 member countries and beyond. Founded in response to the 1973/4 oil crisis, the IEA’s initial role was to help countries co-ordinate a collective response to major disruptions in oil supply through the release of emergency oil stocks to the markets. While this continues to be a key aspect of its work, the IEA has evolved and expanded. It is at the heart of global dialogue on energy, providing reliable and unbiased research, statistics, analysis and recommendations.