Summary
For energy data obsessives, the highlight of the summer isn’t Glastonbury, Wimbledon, or a week at the beach. No, our red-letter day is the annual publication of the Digest of UK Energy Statistics (DUKES). This summer, the data compendium allows us to drill down into quite what a remarkable year 2022 was. Favourable weather blunted the worst effects of the crisis following Russia’s invasion of Ukraine. Meanwhile, simultaneous leaps in oil demand from transport as the Covid recovery continued and in renewable generation as our capacity grows show just how urgent and complex accelerating the energy transition will be.
A warm, windy year
Figure 1: Electricity generated by fuel
Particularly favourable weather conditions in 2022, in addition to increased capacity, saw production of renewable electricity soar by 10 per cent to 135 TWh, exceeding the 132 TWh produced by fossil fuels. Total electricity demand fell due to high temperatures and prices, leading to the UK becoming a net exporter of electricity for the first time in 40 years. Exports increased fivefold compared to 2021, primarily via France-UK interconnectors due to outages in the French nuclear fleet.
Not only did record-high temperatures increase renewable electricity production, they contributed to a 0.8% decrease in total energy demand from 2021. When seasonally adjusted with the impact of temperature on demand removed, there was a 0.9% increase, reflecting the post-pandemic growth in economic activity.
Covid-19 pandemic recovery
Figure 2: Oil consumption by sector
An inevitable increase in energy demand was observed after restrictions were lifted and the economy began to spring back from the lull caused by the Covid-19 pandemic. This increase was concentrated significantly in the transport sector, where there was a 15% growth in demand from 2021. Most of this growth was seen in the aviation sector where demand close to doubled. However, energy consumption by aviation is still 21% lower than pre-pandemic levels, suggesting that further increases in energy consumption by aviation can be expected.
The observed resilience in oil consumption, although a positive sign in the short term, stresses the pressing need to ramp up policies encouraging the decarbonisation of the transport sector. Incentives to switch to EVs must increase if the UK is to achieve its Net Zero goals.
The Russian invasion of Ukraine
Figure 3: Exports of gas from the UK
The Russian invasion of Ukraine had significant impacts on the energy sector. The UK and Europe had to rapidly reduce reliance on Russian oil and gas as sanctions were imposed, driving up costs and shifting historic import and export patterns. Crude oil imports increased by 16% as demand grew and production shrunk. This increase was met largely by the USA, seeing Norway being overtaken as the UK’s largest crude oil supplier. Conversely, the UK became an important exporter of gas for Europe as we passed on gas from our LNG terminals to the continent, with 2022 seeing record gas exports from the UK of 260 TWh, 47% higher than 2021.
The high gas and electricity prices saw a great change in consumer behaviour as people and businesses tried to reduce their energy usage to save money. In addition to warmer than average temperatures, this resulted in a huge 14% reduction in domestic and industrial energy consumption and a 3.8% reduction in overall electricity demand to 320.7 TWh.
A changing energy landscape
Figure 4: electricity generated by source
In the transition to Net Zero, the way we produce and use energy is changing. In 2022, The demand for coal and its production fell to record lows, with only three surface mines remaining in the UK. Nuclear operational capacity was the lowest in 2022 since 2008 because of two nuclear plant closures. However, despite the decrease, the share of generation from low-carbon sources rose to 56.2% in 2022, the second highest value in the published data series.
For yet another year, renewable electricity generation was led by offshore wind which accounted for a third of the total, with the installation of three new offshore wind farms largely contributing to high levels of generation. Increases in generation, albeit some very small, were observed by all renewable technologies apart from bioenergy, which saw the lowest generation since 2018 due to maintenance outages at three large power stations.
Although 2022 was a strong year for renewables, capacity growth in recent years has been slow; added solar PV capacity exceeded that of 2015’s levels only in 2022. To accelerate the deployment of low-carbon energy sources and meet our climate goals, the UK needs to remove barriers to development such as inefficiencies in the planning system and issues in connecting to the gird, as well as providing a stable, positive policy regime with proportionate incentives to investment. Private sector investment will be crucial to meeting Net Zero, so it is imperative that we focus on ensuring the UK remains attractive to international investors.
