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8/10/2019 Energy Presentation29 UKEnergyAnOverview MKeay 2005
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UK Energy OverviewUK Energy Overview
Malcolm KeayMalcolm Keay
Oxford Institute for Energy StudiesOxford Institute for Energy Studies
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Main themesMain themes
Commitment to liberalisation and free marketsCommitment to liberalisation and free markets
Transition from energy surplus to increasingTransition from energy surplus to increasingimport requirementimport requirement
Importance of climate change in energy policyImportance of climate change in energy policy But key decisions (But key decisions (egegnuclear) not yet takennuclear) not yet taken
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Energy BalanceEnergy Balance
Net importer in 2004Net importer in 2004after two decades ofafter two decades of
selfself--sufficiencysufficiency Import requirements likely to increase steadily:Import requirements likely to increase steadily:
by 2020 likely to be of TPES.by 2020 likely to be of TPES. Gas demand continues to growGas demand continues to grow
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UK energy selfUK energy self--sufficiencysufficiency
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Oil production has peaked .Oil production has peaked .
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as has gas production as has gas production
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DiversityDiversity -- 20042004
3.63.611RenewablesRenewables
212188NuclearNuclear
35351717CoalCoal
35353838GasGas
333636OilOil
Electricity %Electricity %TPES %TPES %EnergyEnergy
sourcesource
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Energy SectorEnergy Sector
3% of GDP3% of GDP
7% imports; 9% exports7% imports; 9% exports
35% of industrial investment35% of industrial investment
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Energy Sector OrganisationEnergy Sector Organisation
Nearly all private (some nuclear remains public)Nearly all private (some nuclear remains public)
Oil: BP and Shell (with Netherlands) among oil majorsOil: BP and Shell (with Netherlands) among oil majors Gas: Majors plus BG internationally.Gas: Majors plus BG internationally. CentricaCentrica in UKin UK**..
Electricity: disaggregated. Dominant UK playersElectricity: disaggregated. Dominant UK players
Scottish companiesScottish companies*,*, EdFEdF,, EOnEOn, RWE, RWE
Coal: No significant UK producer, but major miningCoal: No significant UK producer, but major mining
companies (Riocompanies (RioTintoTinto; BHPB; Anglo) have UK listings; BHPB; Anglo) have UK listingsand/or HQs.and/or HQs.
** for the momentfor the moment
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Energy StrategyEnergy Strategy
Reliance on markets and market opening worldwideReliance on markets and market opening worldwide
Diversification of sourcesDiversification of sources International engagement for good governance, andInternational engagement for good governance, and
the development of stable investment and transitthe development of stable investment and transit
regimesregimes
Dialogue to increase transparency, diversity andDialogue to increase transparency, diversity and
liquidity of the world oil market and to improve theliquidity of the world oil market and to improve theinvestment climate in key producing countriesinvestment climate in key producing countries
Cooperation on oil security via IEACooperation on oil security via IEA
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LNGLNG
Grain: 4.4Grain: 4.4 bcmbcm under constructionunder construction
potential for additional 7.5potential for additional 7.5 bcmbcm in 2009in 2009 Milford HavenMilford Haven --Dragon: 6Dragon: 6--99 bcmbcm by 2012by 2012
-- South Hook: 10South Hook: 102020 bcmbcm by 2010by 2010[[ cfcfimport requirement of c 55import requirement of c 55-- 8080 bcmbcm in 2010;in 2010;
pipeline projects includepipeline projects include InterconnectorInterconnector
expansion;expansion; LangeledLangeled; FLAGS; and Dutch; FLAGS; and DutchInterconnectorInterconnector -- total c 60total c 60 bcmbcm]]
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NuclearNuclear
c 20% of electricityc 20% of electricity
Most due to retire by c 2020 (Most due to retire by c 2020 (TornessTorness 2023;2023;Sizewell B 2035)Sizewell B 2035)
Limited flexibility for lifetime extension of AGRLimited flexibility for lifetime extension of AGRtechnologytechnology
Long lead time for new plantLong lead time for new plant
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New nuclearNew nuclear
Not ruled out in principleNot ruled out in principle
But major issues: waste management; liabilitiesBut major issues: waste management; liabilitiesetcetc
White Paper neededWhite Paper needed Decision this ParliamentDecision this Parliament
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RenewablesRenewables
Strong commitment and support viaStrong commitment and support via ROsROs etcetc
Target/aspirations: 10% of electricity by 2010;Target/aspirations: 10% of electricity by 2010;15% by 2015; aim at 20% by 202015% by 2015; aim at 20% by 2020
Expectation targets will be missedExpectation targets will be missed High cost and practical problemsHigh cost and practical problems
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RussiaRussia
UK imports oil (and coal), via world marketsUK imports oil (and coal), via world markets
Possible future gas sourcePossible future gas source Investment and transit issuesInvestment and transit issues
Major players:Major players:BP/TNK (a high point?) c $8bn investmentBP/TNK (a high point?) c $8bn investment
Shell (SakhalinShell (Sakhalinnow withnow with GazpromGazprom;; SalymskoeSalymskoeetc)etc)
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UK ObjectivesUK Objectives
Engagement in dialogue/institutions (EU;Engagement in dialogue/institutions (EU;
Kyoto; WTO)Kyoto; WTO) TransitTransitEnergy Charter TreatyEnergy Charter Treaty
Investment stabilityInvestment stability Inward investment in UKInward investment in UK
Climate change technologyClimate change technology