energy presentation29 ukenergyanoverview mkeay 2005

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

energy presentation29 ukenergyanoverview mkeay 2005

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