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A day without coal: Britain edges towards energy dependence on Russia

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of this site. This site does not give financial, investment or medical advice.

Britain has just experienced its first full day of electricity generation without coal since 1882.

What is interesting about this development is that the way in which Britain has moved away from coal for its electricity use is little discussed.  An article by the BBC published in 2013 however provides the explanation.

The article begins by making the perfectly valid point that Britain uses energy more efficiently than it once did, and that total energy use has fallen

…..we consume less energy in the UK today than we did in 1970, and this despite an extra 6.5 million people living here.

The reason is very simple – we are more efficient both in producing energy and using it. The rise of the less energy-intensive service sector at the expense of industry has also played a part.

Households use 12% less, while industry uses a massive 60% less. This is largely offset by a 50% rise in energy use in the transport sector, due to the huge rise in the number of cars on the road – more than 27 million today compared with 10 million in 1970. The big increase in the number of flights is another important factor.

The Department of Energy and Climate Change (DECC) forecasts that energy efficiencies will continue to offset population growth, so that we will use about the same amount of energy in 2030 as we do today. In other words, the UK will use less energy in 2030 than it did in 1970.

Overall this is of course true.  I would however make the important qualification that one reason for the dramatic 60% fall in energy use by British industry is surely the dramatic contraction of Britain’s heavy industry since deindustrialisation set in in Britain in the 1980s.

Putting that aside, whilst there is no doubt that Britain uses energy more efficiently than it once did, the major reason for the collapse in coal use is that coal is being increasingly replaced in Britain’s energy mix by natural gas.  The BBC article provides the figures as of 2013

In 1970, we used almost 57 million tonnes of oil equivalent in coal and manufactured fuels. Last year, we used less than 3 million tonnes. Bear in mind, however, that we are talking here about the primary source of the energy we consume – coal, oil and gas are also used to generate electricity (see below).

The void left by the fall in coal use has been filled largely by a rapid rise in the use of natural gas and, to a lesser extent, an increase in electricity usage.

By contrast, the use of petrol has remained pretty consistent throughout.

Breakdown of energy consumption

But to get a full picture of where all our power comes from, we also need to look at how electricity is generated.

And here the change in energy mix has been more dramatic. In 1970, coal accounted for about two-thirds of all electricity. Last year, it accounted for less than half, although for a number of years prior to that it made up one-third.

Apart from a sharp dip in the mid 1980s because of the miners’ strike, coal use fell most dramatically during the 1990s….

Oil use has also fallen sharply, from more than 13 million tonnes in 1970 to just 780,000 tonnes last year.

The big fall in coal and oil use in the 1990s was because of the so-called dash for gas, which was underpinned by cheap North Sea gas and the privatisation of the electricity market….

For fossil fuels, the conversion efficiency of power stations is about 40%-65%, depending on the fuel type – in other words, only half the energy stored in the primary fuel ends up as electrical energy. On top of this, power stations consume some energy themselves, while more still is lost during transmission over the national grid.

Breakdown of sources of electricity

Despite the recent resurgence of coal, DECC expects its use in electricity generation to fall sharply over the next 10 years.

There was a brief uptick in coal use in electricity generation before 2013, when the BBC article was written, but since then its use has continued to fall, as shown by the fact that Britain has just had a whole day without it.

In any event, as the article makes clear, the key change in Britain’s electric power generation is the decline of coal and its replacement by natural gas.  It would not be wrong to say that natural gas is replacing coal as the source of Britain’s electricity generation.

Britain’s natural gas historically has come from the North Sea.  However that source is finite, and in recent years production of natural gas in the British part of the North Sea has been rapidly declining.  High investment during the recent period of high energy prices caused total output of both oil and natural gas from the North Sea to rise, but the collapse in oil prices in 2014 has led to a sharp cut in investment, ensuring that before long output will start to fall again.

Moreover even high investment cannot change the fact of the rapid run down in North Sea reserves.  As the Financial Times says

More than 43bn barrels of oil and gas have been recovered since the first UK production in 1967 and a further 10bn-20bn barrels remain to be recovered, according to Oil & Gas UK.

In other words between two-thirds and four-fifths of oil and gas reserves in the British part of the North Sea have already been recovered, making it a certainty that Britain will cease to be a major oil and gas producer before long.

The question is what happens then.

Britain is not investing heavily in nuclear power, it seems that there are insuperable financial, technological and ecological obstacles in the way of reopening coal pits – making that option effectively impossible – and given technological constraints it is difficult to see energy from renewable sources such as wind and solar power making up the difference.  There has been some talk of Britain exploiting its own shales.  However political resistance to that in Britain is very strong, and it seems there may be geological constraints as well.

It is difficult to avoid the conclusion that Britain will soon have to start importing gas, and will have to do so moreover on a major scale.  In fact Britain became a net importer of natural gas as long ago as 2004, and the share of imports in Britain’s natural gas use is certain before long to increase, and to do so drastically.

Some of this gas will no doubt come from other North Sea producers, especially Norway, which continues to have the biggest oil and gas reserves in the North Sea.  However as this study from last year says, even Norwegian output is now well below its peak, with reserves depleting, and besides Norway supplies natural gas to the whole of the EU, not just to Britain.

Britain can no doubt in theory import liquified natural gas from all sorts of places, including the Gulf.  However cost considerations point to Russia as the obvious source of Britain’s future natural gas once supplies of North Sea gas decisively run down if the British economy is to retain such competitiveness as it has left.  It is difficult to see what other commercially viable alternative there is.

Dependence on Russia for import of gas and ultimately for Britain’s electricity supply is not something which should worry the British unduly.  Contrary to myth there is no evidence the Russians have ever used gas as a political weapon, and there is no reason to think they would do so in relation to Britain.  However if and when Britain does start importing natural gas on a large scale from Russia – as it looks bound eventually to do – that will for the first time in history establish a strong economic connection between Britain and Russia.

That fact in itself is bound to change attitudes in Britain towards Russia, changing a relationship which save for brief periods during the Napoleonic and World Wars has always been adversarial, into something which of necessity will have to be more collaborative.  It is doubtful however that there is anyone within Britain’s political class who is willing for the moment to recognise the fact.


The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of this site. This site does not give financial, investment or medical advice.

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