Energy in the UK 2018
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13/09/2018 09:45 13/09/2018 1 v2.indd 2018 UK the in 36355_EUK_Energy 2018 Energy in the UK the in Energy The voice of the energy industry energy the of voice The 36355_EUK_Energy in the UK 2018_LR2.job 09/13/2018 09:58:42 1-A $[color] $[color] B - 1 09:58:42 09/13/2018 2018_LR2.job UK the in 36355_EUK_Energy Contents Foreword 4 From the Climate Change Act to 16 The Energy Overview 6 EMR, Transforming UK Generation Employment within Energy 7 - The Climate Change Act Sets the Scene 16 The Heart of the UK Economy 8 - Investment in Renewables 17 People of UK Energy 10 - Renewable Generation across 19 - Skills 12 the UK -Young Energy Professionals (YEP) 13 - Delivering Security of Supply 22 - Equality and Diversity in Energy 14 - Further Steps Away From Coal 23 - Pride in Energy 15 - Air Quality and Environmental 25 Protection 2 3 36355_EUK_Energy in the UK 2018 v2.indd 2 13/09/2018 09:45 $[color] A - 2 09:58:42 09/13/2018 2018_LR2.job UK the in 36355_EUK_Energy Now and Tomorrow, Building the Future 27 A Changing Retail Market 36 for Customers - Engaging with Customers 36 - Integrating Renewable Generation in the 27 - The Smart Meter Revolution 38 System and the Need for Flexibility - Supporting Customers in 39 - Decarbonisation at Customers’ Level 30 Vulnerable Circumstances - Improving Efficiency in Energy 30 - The Challenge of Heat 31 Energy UK Members 42 - Decarbonising UK Transport 32 2 3 36355_EUK_Energy in the UK 2018 v2.indd 3 13/09/2018 09:45 $[color] B - 2 09:58:42 09/13/2018 2018_LR2.job UK the in 36355_EUK_Energy Foreword Last year I wrote about how the energy We will also be feeding into the Five Year system was changing. This year I could Review in the Electricity Market Reform (EMR), write something similar, as change has continuing to play a crucial consultative role been a constant factor in the industry over for a multitude stakeholders as we have been the last 10 years and 2018 is no different. since the inception of EMR. By supporting cost reduction and incentivising billions of pounds We now have over 70 household energy of investments, EMR has driven growth and suppliers in the market, an increase of 16 established the UK as an international leader in from 2017, we continue to employ hundreds a number of technologies, and is therefore of of thousands of people around the UK, while crucial importance to our members who drive increasing our economic value to £32 billion. the UK’s decarbonisation journey. We have also seen an increase in the number of coal-free days with five days of coal-free Rising to the challenge generation in April 2018. This year our ‘Kick-starting the decarbonisation Celebrating 10 years of action against of heat’ report and consultation on electric climate change vehicle charging standards were opportunities to explore the energy industry’s contribution to On 26th November we will celebrate exactly 10 the future of decarbonisation of both heat and years since the passing of the Climate Change transport. Both provided a valuable contribution Act 2008. This ground-breaking Act has been in setting out the energy industry’s role in the driver of much of the change we’ve seen tackling climate change in the future. Our work in the energy industry since then. And the means we are at the forefront of change in industry should be proud of the efforts and creating a cleaner, more consumer-focused contribution it has made in decarbonising the future energy system. UK’s economy. Future of Energy We regularly see over 50% of our daily energy generation from low carbon sources, and have This year we launched our ‘Future of Energy’ cut our carbon emissions by over half since programme. This report will set out the 1990. We’ve helped the UK lead the way in industry’s position on how to deliver a secure, Europe in decarbonising our economy. low carbon energy system that customers see as fair, and which delivers excellent services, As we celebrate 10 years since the Act choice and value for money to all the UK’s became law we need to focus on the future homes and businesses. opportunities, while also shining a spotlight on other sectors such as heating and transport. Creating a better market Later this year Ofgem will bring in a price cap on all default and standard variable tariffs and it is the role of the industry to address concerns about how the market can function better for all customers, including addressing tariffs that some feel are unfair. 4 5 36355_EUK_Energy in the UK 2018 v2.indd 4 13/09/2018 09:45 $[color] A - 3 09:58:42 09/13/2018 2018_LR2.job UK the in 36355_EUK_Energy Over the years, the industry has shown its desire to address areas of the market that require a more proactive approach. In 2018, we launched an independently chaired Commission on Customers in Vulnerable Circumstances which will play a key role in shaping the future provision for customers, addressing the issues of the past and realigning them for the future. I continue to believe that markets work best for consumers but it is important that as an energy industry we take ownership for its short comings and look to actively address them ahead of future government interventions and actions. We rose to the challenge in 2008 to tackle climate change, I believe we can rise to this challenge to create an even better market, one that continues to give choice but also continues to invest billions of pounds to deliver a reliable and low carbon energy service for all. Lawrence Slade Chief Executive About Energy UK Energy UK is the trade association for the GB energy industry with a membership of nearly 100 suppliers, generators, and stakeholders with a business interest in the production and supply of electricity and gas for domestic and business consumers. Our membership encompasses the truly diverse nature of the UK’s energy industry from established FTSE 100 companies’ right through to new, growing suppliers and generators, which now make up over half of our membership. Energy UK is proud to be accredited with the Investors in People Standard and is a London Living Wage Employer. 4 5 36355_EUK_Energy in the UK 2018 v2.indd 5 13/09/2018 09:45 $[color] B - 3 09:58:42 09/13/2018 2018_LR2.job UK the in 36355_EUK_Energy The Energy Overview £6bn 682,000 £32bn Jobs supported across the UK £12.6bn £££ economic value Tax contribution investment in the UK created 72 53% of power generation active domestic energy suppliers from low carbon sources 900,000 6 Electricity generating installations 7 36355_EUK_Energy in the UK 2018 v2.indd 6 13/09/2018 09:45 $[color] A - 4 09:58:42 09/13/2018 2018_LR2.job UK the in 36355_EUK_Energy The Energy Overview Employment within Energy A workforce of 138,000 people are employed directly within the energy industry, with a further 544,000 employed indirectly through supply chains, consulting and other energy related activities. This workforce is spread throughout the UK and work to ensure the UK always meets its energy needs. This map illustrates direct employment by the energy sector throughout the UK. Scotland 20,000 North East Northern Ireland 6,000 2,000 Yorkshire and Humber North West 8,000 14,000 East Midlands West Midlands 16,000 13,000 Wales East 7,000 8,000 London 13,000 South West South East 10,000 24,000 Source: ONS, figures do not sum to 138,000 due to rounding. 6 Electricity generating installations 7 36355_EUK_Energy in the UK 2018 v2.indd 7 13/09/2018 09:45 $[color] B - 4 09:58:42 09/13/2018 2018_LR2.job UK the in 36355_EUK_Energy The Heart of the UK Economy The energy industry fuels the UK economy like a living heart, delivering energy to every corner of the country, supporting GVA per sector (£Million) industry, business and homes with a constant and reliable source of power. How is this done? A force of 138,000 directly employed and a further 544,000 workers supported indirectly across the UK, working in unison to deliver a competitive, smart and decarbonised energy sector. Despite uncertainties around Brexit and a continually challenging environment, the sector still employs one in 51 people from Source: ONS across the UK in a variety of regions1. In 2017, £31.7bn was created in economic value, up £1.2bn from The energy sector’s contribution to the UK economy has 2016. continued its upward trend since 2011. In 2017, £31.7bn As the UK prepares for its departure was created in economic value, up £1.2bn from 2016. In from the European Union, a secure comparison, £12.2bn was realised from agriculture and £22bn 2 and sustainable supply of power from the mining and quarrying sector . and gas becomes ever more vital. To this end, the UK has invested Gross value added (GVA) measures the value of goods and heavily in technology and expertise services produced minus intermediate consumption. GVA which have been major influences can be broken down by industry and sector. The sum of GVA in cutting emissions from the energy over all industries, plus taxes on products minus subsidies on sector by 57% (on 1990 levels)2. products gives the gross domestic product (GDP). However, this is only the beginning of the energy sector’s transformation as the UK forges ahead towards its goal of reducing carbon emissions by 80% on 1990 levels by 2050.