ECONOMIC REPORT 2013
63
In some analysis undertaken for Oil & Gas UK,
London Energy Consulting examined the energy
use and carbon intensities of various OECD, but
mainly European countries and compared these,
as shown in Figure 44. The UK’s Carbon Budgets
(carbon emissions’ targets) are superimposed
as green lines, together with the 2050 target.
Interestingly, the UK is better placed than several
comparable economies such as the Netherlands,
Germany, Japan and Denmark, but it is behind
France (due to the effects of nuclear power) and
Italy and Spain (due to their warmer climates).
Above all, though, this chart demonstrates
clearly the magnitude of the task if the 2050
target is to be met by almost any Member
State of the EU, given that major energy
investments such as large power stations and
oil and gas fields typically last for 45 to 50
years and that 2050 is only 37 years away.
a) Electricity
At the time of writing (July 2013), an Energy
Bill is being debated in parliament. It seeks to
reform the electricity market and stimulate
the very large investment in low carbon
power generation, especially new nuclear and
offshore wind, to meet the government’s own
targets as well as its European obligations.
Within the Bill, the main instruments being
proposed are:
•
Contracts for Difference (CfDs)
– a means
to support the incomes of generators who
invest in low carbon technologies where
generation costs are above market prices.
•
A Capacity Mechanism
– a payment to
encourage the provision of the generating
capacity that will be required to back
up intermittent renewable power and
stabilise the grid.
•
An Emissions Performance Standard
–
a mechanism to prevent the building of
unabated coal fired power stations, but
not gas, although in future the standard
could be adjusted so as to affect all
unabated fossil fuel power.
Figure 43: The Energy Policy Triangle
Figure 44: Carbon Emissions for Various OECD Countries
(in tonnes of CO
2
per person per year,
averaged over the years 2006 to 2010)
EU
and the
UK
Reduced Emissions of Greenhouse Gases:
by 20 per cent in 2020 and 80 per cent in 2050 (v 1990)
Security of
Supply
Affordability / Economic
Competitiveness
Source: Oil & Gas UK
Source: London Energy Consulting analysis;data from Gapminder
Carbon Intensity (gCO
2
/kWh)
Energy Use (kWh/person/day)
2050 target = 2
CB4 = 5
CB3 = 6.5
CB2 = 7.1
CB1 = 7.7
250 230 210
190 170 150 130 110
90
70
50
20
40
60
80
100
120
140
160
180
Source: London Energy Consulting analysis; data from Gapminder
