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Uk Slips Out Of The Global Energy Ranking, Loses Out On Being One Of The Top Ten Energy Markets
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The UK is facing an uncertain time post Brexit. The country has been performing low on a global level. In the latest events, UK has slipped out of the top 10 spots from an international league table of countries that rank nations based on their energy performance and sustainability.
The World Energy Council pointed out the new UK government’s lack of clarity about energy policies as the biggest reason for this downfall. It emphasized that as the country lacks proper directions in dealing with its energy portfolio, there has been a gap in the potential energy supply.
The UK has been amongst the top leaders in the council’s “Trillema Index”. This index has been maintained for the past six years. The council judges countries on the basis of energy security, costs for power generation and decarbonisation methods and ranks them in order of their performance. The UK had maintained a top spot on this Index.
However, it was the Brexit vote that turned the tables for the UK energy market scenario. The country’s decision to reduce renewable energy subsidies and myriad of changes in foreign ownership has resulted in investment uncertainty. Some of the decisions of the government have brought forth heavy challenges for the UK, as per the World Energy Council, which has global energy companies as its members.
Sadly, the UK was also on the list of the countries which may face negative changes in the near future. The same was observed for top economies like the US, Germany and Japan. The countries which occupied the top three positive slots were Denmark, Sweden and Switzerland while UK slipped down to the 11th spot.
According to the opinion of the World Energy Council’s chief, UK suffers from a “distinct lack of policy direction” in the energy sector. The council has this opinion, despite UK’s approval for Hinkley Point C, which would generate 3,200,000,000 watts of electricity.
“Challenges in terms of improving affordability, and delivering security of supply as North Sea assets deplete, coupled with the rundown of worn-out legacy infrastructure, including coal-fired generation, has left the UK with a potential energy gap,” said Joan MacNaughton, executive chair of the council. She also pointed out that “Renewables are increasing as a percentage of the UK energy mix, but their output is not yet at a level where energy security can be guaranteed.”
Joan MacNaughton was also not very hopeful about the gas sector of the UK. She said up front that there were no major changes in the county’s gas policy since 2013. She hinted that there was no clarity regarding the government’s stand on “dash for gas” approach. She also added that the government has not decided upon any alternative for gas even when the gas sector contributes to half of the UK’s electricity generation in 2016. Last year the role of gas sector was limited to one third part of the electricity supplies, but its contribution has increased because several coal plants in the UK were shut down.
As per the council, the UK government’s stand on foreign ownership of energy infrastructure as declared during Hinkley Point C contract adds more uncertainty to the scenario of investments in the energy sector. It brought to light that solar power installations were smashed due to the government’s decision to reduce onshore wind and solar subsidies. These changes would be directly reflected in the solar energy investments as well.
The council aforesaid, that the present government’s policies could not give a clear indication about the future of low-carbon energy. MacNaughton said that “The market knows some of what to expect until 2020 but after this point there are no answers to how the country will finance the low-carbon transition.”
To sum up, it was the UK government’s unclear stand on the low-carbon energy and lack of direction on energy sector has made it lose its top spot in the World Energy Council. These need to be taken into account by the Theresa May government and quick steps to improvise the condition should be suggested and implemented in order to strengthen its position in the World Energy Market.
Brijesh is a financial advisor at Freepricecompare.com and a passionate blogger. He writes on personal finance and money-saving tips. He suggests all UK households to compare energy prices before renewal energy contract with existing supplier. When he isn’t writing, he is spending time to find advance technique of farming and its way of applying. He also plays his guitar gifted by his father.
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