UK Energy Security Challenges

Introduction

Energy is one of the vital requirements for the efficient functionality of a country especially developing countries and as such represents a major concern for country governments and a requirement to be fulfilled. Non- Renewable sources of energy for instance such as fossil fuels which compact underground and provide oil enables a reliable source of energy for a country and is more likely to improve the growth of the economy. Renewable sources of energy on the other hand can be easily regenerated and therefore supply energy continuously for a long period of time and therefore ensure energy security in a particular country that explores it (Brenner, 2018). The question of whether the UK energy resources can be able to capable of meeting the peoples as well as the industrial requirements highlight the energy security within the UK. Mihajlovic and Trajkovic (2018) highlights that the more rapidly a countries economy advances the more energy it consumes in transport, power generation as well as other crucial needs. The continued growth of UKs population necessitates a higher demand for energy and as such UK depends heavily upon energy imports and with Britain exit from the EU, altered policies are likely to present an energy problem in the UK. This essay seeks to review this problem, its various causes as well as possible solutions to the problem so as to ensure energy security within the UK in the Future.

Situation

According to data from UK Department for Business, energy, and industrial Strategy (2018), electricity consumption in road transportation has increased by 33% while gases and petroleum has seen a drop in it usage since 2010. Dependence on fossil such as oil, natural gas and coal fuel in the UK has been dropping significantly since 2008 from 91.2% to currently 80.1% consumption share highlighting the countries high reliance of non renewable sources of energy which in itself presents an energy security issue given the prediction of all the oil wells around the world drying up by 2050 (OPEC, 2016). While in the past natural gas, oils and coals were in plenty and therefore available within the market for the UK enabling a surplus production in the UK up to the 21st century, the oil and gas surplus have now greatly diminished leading to a trade deficit that has made energy supplies less affordable and available highlighting UKs energy security issue. The rapid growth of the world population has further increased the demand for energy, and it is further projected that the global energy demand is expected to exceed the current demand by 50% in 2020 highlighting the lack of dependability of non renewable energy sources in the near future.

Increased development especially from third world, developing countries has increased the demand for fossil fuel energy which represents the main source of energy used around the world due to limited sources of renewable energy especially in these developing countries. Limited reserves of fossil fuels combined with the increasing costs of research practices to develop renewable energy sources as well as climatic threats from green house gases and CO2 further impose a global limitation in the continued production of natural gases, oil and coal further emphasizing the scope of the situation. It is worthy to note therefore that in the next 50 years energy sources and supply will be a problem for all countries across the World and not just the UK (Mihajlovic, and Trajkovic 2018; Ang et al., 2015).

Problem

Energy security and the availability of sufficient energy for commercial as well as domestic purposes highlight the major problem that UK as well as the rest of the world face. UK immensely depends on non renewable sources of energy and as highlighted by Mansson (2015) more than three quarters of the energy utilization in the UK is accounted for by the non renewable fossil fuels. Despite the convenience and efficiency of this source over the past years, recent research studies highlight a fast rate of depletion of the oil reserves worldwide and thus calls for the need to establish renewable sources of energy to fill the void of energy needs and demands. With an increasing population which subsequently causes an increase in demand for energy as well as lack of adequate development of renewable energy resources, UK has developed an energy insecurity issue when it comes to its sources of energy. In addition to these, Abdo & Kouhy (2016) and Spataru et al. (2015) highlights the occurrence of unusual events that have further impacted the energy insecurity within the UK including the dwindling of the North Sea Oil Production and political occurrences such as the British Exit from the European Union.

According to Butler (2014) of the Financial times the dwindling of oil production from the North Sea oil officially commissioned and opened as a project to support the energy requirements of the UK as well as Norway has significantly affected the UK energy security plan pushing the country to depend more on energy imports and thereby highlighting a problem of energy insecurity. Robinson and Morgan (2016) highlights that currently, North Sea oil production is struggling and as such fluctuating and dwindling under the weight of declining outputs, low investment and higher taxes which subsequently raise decommissioning costs. Due to the current political decisions and climate within the UK the government imposes high taxes to be able to recover the high budget deficit and as a result the oil production continues to suffer and may eventually lead to field shut in Ambrose (2018). This could substantially affect the level of energy production within the country and subsequently worsen the oil insecurity issue experienced.

Given the dwindling rate of internal oil production by the UK through its North Sea Plants, UKs energy supply increasingly depends on imports from other countries. Its membership in the European Union enabled it to effectively trade oil under the Internal Energy Market which applies similar trading rules across the EU to enhance the efficiency of energy trading including no imposed tariffs (Blake, 2017; Fouquet, & Johansson, 2008). However Brexit another recent unusual occurrence effectively impacts the energy sector within the UK as their exit means they can no longer trade under the Internal Energy Market of the EU which means higher tariffs and prices for energy, further compromising the ability of the nation to ensure energy security within the near future (Ziv et al., 2018).

The major consequence of Brexit to the Energy sector is attributable to the single market in electricity and gas. As illustrated by Pollitt (2017), electricity and gas market in Europe is extensively consolidated and integrated with advance establishment of single market for gas and electricity. Market deregulation, wholesale market for energy, and non-discriminatory rules in accessing pipelines and transmission lines within the EU, exit of UK from the union means potential increase in prices (Abdo, 2011; Jewell et al., 2014). Nevertheless, the electricity imported to UK is only 6% hence effect felt can be little. The coordination for the future growth and interconnector may be severely affected suggesting an increase in renewable energy trading. Other concern raised is deregulating wholesale maker model driven by establishing stricter rules in electricity production stages, for instance decentralizing renewable electricity supply (RES) system. Study by Di Santo et al. (2015) on Brazil integration of smart grid pilot projects observed that it may be the future of power systems by reducing technical and commercial losses and enhancing service quality and reliability but its implementation can be disastrously expensive. As such, the UK need to in place policy and regulatory measures such as grid georeferencing and distributed system that is independent from EU system.

In addition to this Teverson (2018) highlights that for a successful trade of energy between UK and EU effective infrastructure which have been proposed by the EU but are yet to be built are required to facilitate the transportation. Given the possibility of Brexit and the fact that these infrastructures are longtime high investment projects their adequate and timely construction may not be possible due to the withdrawal of investors pending the definition of which rules to use as a result of britains exit from the European Union, this further affects UKs energy security following Brexit. Demski, Poortinga and Pidgeon (2014) further highlights that the energy insecurity issue faced by the UK not only stem from inadequacies in supply of energy and political considerations but also due to climatic restraints and the need for environmental conservation. In addition to the air pollution caused by mining and use of the fossil fuels in non-renewable energy, Rahman et al. (2017) highlights that weather conditions caused by an arctic anticyclone combined with winter storm causing much snowing in the UK that has brought it to a standstill and caused an increase in the prices of gas further enhancing the energy insecurity issue within the UK.

However with the background of all these problems facing energy supply and security within the UK, generating solutions and ensuring the restoration of the energy security is a crucial agenda for the UK government and one that needs urgent addressing to ensure restoration of the country’s economy. Some of the solutions to these problems are critically analyzed to include.

Solutions

Developing Renewable Energy Sources

One of the reasons UK as well as the rest of the world have been plunged into a looming energy crisis includes the over reliance of non renewable energy sources which threaten depletion in the near future. Development of renewable energy sources such as Wind, solar power as well as the development of nuclear energy is likely to develop an ever ending supply of energy and subsequently solve the energy insecurity issues experienced. In an address at the Multi-Law European Conference, Matsumoto et al. (2015) and Nyman (2018) highlights that Europe has great sources of indigenous energy which will not only do away with the impending energy insecurity within the UK but also provide an inexhaustible source of energy that is cheap and clean, in consideration to the various environmental conditions. These include solar power and wind energy.

Harnessing these natural sources of energy which are guaranteed to be available for the rest of life on earth provides an efficient solution to the energy security crisis in addition to a development of nuclear energy which is within the plans of practice of the UK government. In addition to these other sources that may be explored include hydropower, Biomass as well as other sources of green energy. Bolton, Foxon and Hall (2016) further highlights the possibility of investment on low carbon technologies.

Research by Bett and Thornton (2016) highlights the capability of UK to be able to produce up to 70% solar and 30% wind energy at any one particular time. These are based upon the wind-irradiance distribution which is highlighted to have a stronger cycle in the UK due to the rotational tilt of the earth and the geographical positioning of the UK within the globe. The potential of these energy sources in being able to effectively solve the energy crisis within the UK is clear given the increased investment in the field in the recent past. Vaughan (2018) points out that the amount spent by companies on green energy within the UK is steadily rising highlighting the potential it has as an energy source subsequently confirming that substantial investment in the field can greatly increase energy supply within the UK and effectively minimize the deficient in energy supply and eradicate the energy insecurity.

Ellabban et al. (2014) and Bhattacharya et al. (2016) further highlights a global policy for countries to effectively invest in renewable sources of energy. The UK whose current energy supply from green and renewable sources accounts for only 10% of the total energy requirement can effectively increase this level of production to higher percentages over time given the already availability of equipment and technology to take up the energy production (Spataru et al., 2015; Abdo, 2011). While this may effectively increase the investment in the short term for the UK economy, given the increasing process of non renewable energy sources and their further rapid depletion, this investment is likely to pay off in the long run and greatly fluctuate after the installation and design of the wind turbines and other equipment necessary for the production of the renewable energy (Crabtree, Zappala and Hogg, 2015).

Various research studies however including Bolton, Foxon and Hall (2016), highlight their uncertainties in the capability of developing adequate renewable energy sources to be able to combat the energy insecurity issue faced in UK as well as the rest of the world. In their report for instance they highlights that renewable energy sources as well as low carbon technologies due to their relative immaturity require a high investment and as such the low operational costs do not readily fit the existing energy market and will therefore not be adequate in solving the problem. In addition, Pfenninger and Keirstead (2015) further highlights that the nuclear energy direction is not likely to bare any fruits either due to the increasing disfunctionality in the nuclear power plant development process not only experienced in the UK but also in Germany leading to the close of their nuclear program. These reservations however stem from financial problems and other problems not actually related to the energy production process highlighting that through investment and technology they all can be solved with time to enable the exploitation of the use of renewable energy sources as well as nuclear energy which consequently provides a solution to the UK energy insecurity.

Nevertheless, renewable energy present difficult in generating especially high quantities of electricity matching those generated by traditional generators. According to Jewell et al. (2014) and Bhattacharya et al. (2016), this postulate balancing different energy sources or reducing the amount of energy usage. Furthermore, unlike fossil fuel, renewable energy can be unreliable as it depends on weather for instances hydro-generators require rain, solar need sunshine, and harnessing power from wind requires wind to operate, which can be unpredictable and inconsistent (Jewell et al., 2015; Ellabban et al., 2014; da Silva et al., 2016). Therefore, during winter, use of solar energy is significantly affected because of prolonged cloud cover. In order to boost reliability problem (varying wind speed and nigh or cloudy days for solar energy), renewable energy requires installation of storage capabilities and back-up system. These storage system increases the cost of operation significantly. Despite its vast potential, renewable energy has environmental impacts such as for solar and wind source result in habitat loss and land use (require massive space), use of hazardous materials during manufacturing, and importantly, it heavily depended on technology such as photovoltaic (PV) and solar cells, which are dynamic changing rapidly (Ellabban et al., 2014; Goosen et al., 2016).

As a solution to the problem emanating from energy issues, development of smart cities characterized by integration of electric vehicles (EVs), Smart charging, Vehicle to Grid (V2G), Smart grid, and Advanced metering is perceived as fundamental elements in addressing the issues. According to Mwasilu et al. (2014), deployment of smart grid interaction and EVs acts as key aspect in reducing energy usage. However, growing penetration of EVs and Vehicle-to-Grid opens operational challenges such as congestion and voltage drop in electricity distribution station. Proposal to integrate EV virtual power plant (EV-VPP) in attempt to enhance interaction between EV and Distribution System Operator (DSO) particularly during constant charging and discharging (Hu et al., 2017; Dincer et al., 2014). Additionally, mechanism such as pro-data, market-based, and constrained market-based approaches present future complication because it high financial (price per unit), technological, and skills depended (Ha, & Fujiwara, 2015; Filho, & Voudouris, 2013). The findings by Silva et al. (2018) on sustainability of smart cities highlight the extent to which it demands finance, technological advancement, and governance acting as major barriers. Based on the research conducted by Brenna et al. (2012), found huge inadequacies in distribution and supply of low voltage electricity proposing designing of Sustainable Energy Microsystem (SEM) that integrates various subsystem such as dispersed generation and generation for urban mobility. Ideally, the entire concept depends on demand-side management and energy efficiency that can be significantly problematic for unreliable energy source.

Enhancing Post Brexit UK-EU relationship

The detrimental factor of UKs exit from the EU is yet to be fully experienced given the uncertainty of the relationship between the UK and the European Union which is very crucial in the availability and provision of energy to the UK. The development of a smooth and efficient relationship that enables smooth trading between the EU and the UK is crucial in being able to ensure continued importation of non renewable energy sources comprising majorly oil and gas which make up up to 70% of the total energy demand within the UK. According to the chair of the House of Lords governing the European Union Teverson (2018), the European Union Member states subscribe to the rules of trade highlighted in the Internal Energy Market (IEM). IEM enables the trade in energy within member states without imposed tariffs and other legal payment which effectively make the trading process within these countries efficient and reliable. The UK being a member of the EU extended such benefits to them and as such the capability of accessing imported energy sources which ensured the UK energy security is kept at bay.

Further New Europe (2018) highlights that in order to facilitate efficient trading of energy between the EU and UK, infrastructure is needed and crucial in the transfer of the energy. The infrastructure which has been proposed and is yet to be constructed, is capital intensive and long term and as such the investors who directly deal with the European Union require a secure guarantee of income before embarking in its construction. Brexit is likely to alter the operations within the European Union as well as minimize the faith of the investors to being able to develop the infrastructure as such development of a post Brexit arrangement between the EU and the UK is vital in enabling the contribution to these plans which in turn substantially restores the energy security in the UK.

In addition to this, 21 of the UKs electric energy comes from Nuclear reactors which relies on trade in nuclear fuel that is made possible through the EU based Euratom Treaty. Failure to develop adequate replacement arrangement makes different countries unable to trade nuclear fuel, with the UK further plunging it to a deeper energy insecurity which further highlights the development of a successful and useful post Brexit arrangement with the UK to facilitate the continuance of these trade agreements. The alternative is to develop an independent energy sector which will be far too expensive for the already sour economy of the UK to handle.

According to Gantz (2017), the British Prime minister in an attempt to develop a useful post Brexit relationship proposed a free trade Agreement (FTA) to be able to govern the govern future trade arrangement between the European union and the United Kingdom, a proposal that was further advanced to the Comprehensive Economic and Trade Agreement (CETA). The FTA represents a legal feasible form of preferential trade relationships that would generally permit the duty free, quota free exchange of goods and services between the UK and the other member state of the European Union thereby subsequently enhancing the continued importation of energy by the UK which is guaranteed to minimize the energy insecurity currently experienced within the country.

Given the overreliance of UK to importing energy the only way to be able to solve the energy insecurity would include employing appropriate negotiation tactics to enable formulation of other policies allowing it to trade with other members of the EU following its exit from the Union.

Conclusion

Summary

In summary energy includes the most fundamental requirement for the development of a country’s economy as well as its socio-political relationships. UK along with all other countries across the world has in the past depended wholly on non renewable energy sources which has subsequently been able to carter for the required needs. However due to the current rapid depletion of these oil reserves and the expected dry up of such reserves in the near future, the prices of these non renewable energy products such as gases and oil have tremendously increased, coupled with the increased demand due to the continued increased population within the UK there is an of energy on security in the country that begs for attention and to be fixed in the near future.

Worse still, given the dwindling of the oil reserves in the North sea that highlights UK major source of oil as well as the increased taxes and operation costs which further affects operations in the oil well and may lead to a shut down the UK has been forced to over rely on imported energy sources. These sources are also threatened by the terms of trade yet to be set due to the exit of Britain from the European Union further plunging UK deeper into uncertainty and a bigger problem of energy insecurity. This further exposes the growing concerns of UKs energy security particularly with Brexit in the horizon.

Recommendations

To be able to solve this energy insecurity issue first address to the development of a long term independent energy production system is necessary and crucial within the UK. This can be effectively carried out by developing renewable energy sources and plans including harnessing solar power and Wind energy. Further unexploited oil reserves within Africa and America can be exploited to enable the continued supply of non renewable energy

Given the exit of the UK from the European Union, new favorable trade agreements that allow free trade for the United Kingdom with other member states of the European Union should be developed for the purposes of enhancing continued importation of energy by the UK to carter for its demands. These trade agreements could also be extended to other areas where the non renewable reserves are yet to be fully exploited to ensure the success of a long term energy importation policy by the UK so as to ensure energy security in the future.

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