Energy challenges:
security

Countries that rely on imported fossil fuels to power their electricity supply may be exposed to security of supply issues such as fluctuating fuel prices and disruptions to fuel supplies, due to political or geographical instability.

The price of imported fuel is affected by global supply and demand and can therefore fluctuate. As demand for electricity in emerging economies grows, the global demand for fuel to generate electricity is likely to increase overall.

Meanwhile, the world's fossil fuel reserves continue to diminish. This combination of increasing demand and diminishing supply may drive up the international market price of fossil fuels.

Countries whose electricity supply relies on imported fuel can mitigate security of supply issues by importing from diverse sources. Political or economic instability or a natural disaster in one region need not disrupt the importing country's fuel supply – they may simply be able to import from elsewhere.

Security of supply can also be achieved by reducing dependence on imported fuel. Countries with indigenous energy resources such as fossil fuels may be able to reduce their dependence on imports by increasing domestic production.

Using energy sources with a high energy density – such as uranium used for nuclear fuel – can also help to alleviate security of supply issues. Such fuels are easier to import and stockpile than those with a low energy density. In the short term, stockpiling fuel can also help to cushion a country against fluctuations in the price and availability of imports.

The UK Government intends to improve the security of our energy supply by encouraging imports from more diverse fuel sources, by generating a larger proportion of the country's electricity from renewables and by using nuclear energy, which relies on fuel with a high energy density.

The UK energy supply increasingly depends upon the import of fossil fuels, which exposes us to security of supply issues such as fluctuating fuel prices and disruptions to supply.

In 2014, some 30% of the electricity supplied in the UK was generated from natural gas and 30% was generated from coal. In the same year, 45% of the natural gas used in the UK – for cooking and heating, as well as for generating electricity – was net imports, as was about 90% of the coal used in UK coal-fired power stations. .According to the National Grid [FES 2015], in 2020 the UK is forecast to import between 52-66% of the natural gas that it used in the UK. 

The price of imported fuel is governed by global supply and demand, so it can fluctuate unpredictably. The high proportion of imports in UK fuel supplies could magnify the supply security implications of this instability.

Increasing UK dependence on imported energy could mean higher bills for energy customers. Fluctuations in the global energy markets may lead to electricity-generating companies paying more for fuel, and this price increase could be passed along the supply chain to UK households.

The UK Government intends to improve the security of our energy supply by encouraging fuel imports from a more diverse range of sources, by generating more of our electricity from renewables and by using nuclear energy, which relies on fuel with a high energy density (uranium).

The Government is committed to increasing the proportion of UK energy generated from renewable energy sources to 15% by 2020, thus reducing our dependence on imported fuel.

We are unlikely to eliminate fuel imports from our energy mix in the short or medium term, so the Government will encourage imports from a wider range of countries. This should spread the risks posed to the security of our electricity supply by political and geographical disturbances in supplier countries.

In addition to fossil fuels, the UK is likely to continue importing uranium, the fuel used in nuclear power stations. Importing uranium does not pose as great a risk to security of supply as importing other fuels because it has a high energy density – large amounts of energy are contained in relatively small amounts of uranium. This makes it easy to transport and store, even in the quantities required to generate electricity on a national scale.

What can UK energy customers do to help?

Everyone in the UK can help to improve energy security by being more energy efficient. This will reduce the demand for electricity and ease the pressure on suppliers to keep importing.

Energy efficiency measures such as loft and cavity wall insulation, installing a modern boiler and energy-saving light bulbs will add up to substantial savings on the collective UK energy bill.

Businesses and householders can also help by generating their own electricity locally through microgeneration – solar photovoltaic (PV) panels, small wind turbines and run-of-river hydroelectric schemes.