What next for the UK as coal hits all time low but renewables falter?

On Thursday (29 September) the Department for Business, Energy and Industrial Strategy (BEIS) released UK energy statistics for the second quarter of 2016, but with coal and renewables generation both falling, does the Government need to adjust its energy policy?

The Energy Trends report highlights the generation of energy and electricity, as well as covering prices to domestic and industrial consumers, and maps it against the same period in 2015.

The statistics sound promising at first glance, with coal accounting for a record low 5.8% of all generated electricity. With gas and nuclear claiming 45.3% and 21.3% shares of the energy mix, it appears that the UK’s low-carbon ambitions are coming to fruition.

When accounting for warmer temperatures, emissions for the second quarter of 2016 had fallen by almost 6% compared to the same period the previous year. But with renewables share of the mix falling, does the UK need to adjust its policies?

The data forms another example of the UK’s ever-changing energy mix, and to summarise the latest trends edie round’s up six notable factors found within the crux of the data.

Climate contributing to consumption

The analysis revealed that total UK energy production was actually 3.6% lower compared to the second quarter of 2015. While this may reflect on the UK’s role as a net importer (more on that later) it does suggest that a tweak to how the nation interacts with the environment – and in particular the temperature – could actually lower consumption as well.

While 2015 smashed the record for the hottest year since reporting began in 1850, the analysis notes that the average temperature for the second quarter of 2016 was overall 0.2 degrees warmer. The final energy consumption data – which excludes non-energy uses – states that UK consumption was 1.7% higher compared to this time last year. When analysing the data on a “temperature corrected basis”, final energy consumption actually rose by 3.1%.

With 2016 showing no signs of ending the record-breaking slew of hottest months, the UK could potentially lower overall energy consumption by tailoring grids and systems to account for an increase in temperature. Utilising innovative concepts for cooling systems would likely be the first step.

Is demand response the hero we need?

As mentioned, the share of electricity from renewable generation – hydro, wind, solar and others – fell from 25.4% in 2015 to 24.9%. While this is only a marginal fall, the fact that UK renewable capacity grew by 14% to 32.5GW compared to this quarter last year suggests that demand response might be able to tackle inflexible renewable generation.

In fairness, primary electricity output was 3.1% lower this year, with nuclear-generated electricity also falling by 1.5%. However, electricity generated from wind, natural flow hydro and solar fell by a combined 8.5%, largely due to lower wind speeds, less rainfall and a decrease in sunlight hours. Total low-carbon generation accounted for 46% in Q2 2016, a decrease of 0.8%.

Despite multiple projects increasing renewable capacity by 3.9GW, the UK is struggling to utilise varying levels of generation. The 19.5 TWh of renewable electricity generation produced in Q2 of 2016 is 2.2% lower than 2015. With this in mind, the National Grid’s venture into demand response could finally balance out how renewables interact with the grid, especially after the summer of excess.

A good year for biowaste

While renewables generation fell, there was one saving grace within the industry. The analysis revealed that the production of bioenergy was 8.8% higher compared to the second quarter of 2015. Bioenergy showed the highest absolute increase in generation, rising by 9.2% from 7.1 TWh to 7.7 TWh over the course of 12 months.

The report noted the increased biomass generation from the converted third unit at Drax as a major factory. Last year the biomass company claimed that bioenergy would be needed to balance ‘unreliable’ forms of renewables, and it appears that this prediction has proved true. Bioenergy was also making strides in the transport sector, with the analysis showing that liquid biofuels now represented 3.4% of petrol and diesel consumed by transport, a 16% rise on the second quarter of 2015.

With this in mind, the Government’s decision to launch of a consultation to reform the Renewable Heat Incentive (RHI), which would see a 98% reduction in the deployment of non-domestic biomass boilers, might prove critical to how the UK interacts with a stabilised renewable output.

Severing ties with coal

The fall of coal is an unsurprising trend considering that it’s output in the UK is at a record low and that the nation is committed to closing unabated coal-fired power stations by 2025, and restrict use from 2023. However, the fact that the coal production fell by 61% compared to 2015 highlights just how quickly this transition is taking place.

In total, one million tonnes of coal was produced in the UK, with deep-mined production down by 99% to 6,000 tonnes. The last two quarters of 2015 marked closures to large collieries like Thoresby, Hatfield and the UK’s last large deep mine the Kellingley colliery. Surface mine production was also down by 39%, as mines produce less coal as they near closure.

Even imports of coal in the second quarter of 2016 were down – 77% compared to the second quarter of 2015 – to 1.2m tonnes due to low demand. This represents the lowest value of imported coal for 18 years.

Brexit, trade and an import addiction

Coal imports may have fallen due to low demand, but this is a rare case for a nation that has seen its carbon footprint rise by 3%, mainly due to its reliance on imports. This focus on imports also extends to gas, with imports in the second quarter of 2016 reaching 20% in comparison to 2015.

Largely driven by Norwegian imports, which was up 34%, the UK was a net importer for all gas and oil products, which reached 4.9m tonnes in 2016 compared to 4.7m the year prior. When accounting for exports decreasing by 27%, net imports actually increased by 56%

With cabinet members still unable to clarify the ramifications of Brexit, especially in regards to trade, the UK’s insistence to import a variety of goods and resources could soon come unravelled if trade deals can’t be established as it leaves the European Union.

Does Scotland’s renewables revolution need a rethink?

The analysis paints an interesting picture for those North of the boarder. At the end of 2015, England accounted for 62% of renewable capacity, in comparison Scotland held 25%. England also accounted for 65% of the UK’s generation – driven by a high share of bioenergy – with Scotland generating 26%.

This may seem quite balanced on paper, and actually seems impressive once capacity – which rose by 5.1% or 0.4 GW in Scotland – is accounted for. However, with 0.3 GW of the increase attributed to new wind capacity, new storage and grid systems may be needed to accounted for poor wind generation.

The analysis showed that generation from onshore and offshore wind fell by 18.8% and 9.1% respectively, which exceeded the impact of increased capacity. Even with renewable generation rising by 14% over the same period, Scotland’s ventures into hydro – which saw overall UK generation fall by 35% – suggests that the country’s leading renewables sector may be in danger of peaking without adjustments.

Matt Mace

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