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LONDON (Alliance News) - The UK Department for Energy and Climate Change Thursday said UK energy production fell by 1.5% in 2014 due to falls in UK coal and oil production alongside a decrease in nuclear output, whilst gas and renewables experienced growth as dependency on fossil fuels continues to fall.
In a report conducted by the UK Statistics Authority, the Department said the 1.5% fall in UK energy production from 2013 was "the smallest in 12 years." Production fell to 112.6 million tonnes of oil equivalent compared with 114.4 million tonnes in 2013 and 122.0 million tonnes in 2012. Total energy production in the UK has fallen steadily every year from 157.9 million tonnes in 2010.
In 2014, UK petroleum production fell 2.3% year on year to 43.5 million tonnes of oil equivalent from 44.5 million tonnes in 2013. UK petroleum production has continuously fallen for years, falling from 69.0 million tonnes in 2010 as the North Sea becomes more expensive to operate and investment dwindles.
Most oil and gas fields in the North Sea are ageing and becoming more expensive to maintain. The recent sharp slide in oil prices to about USD66 a barrel, from over USD115 a barrel last June, has put pressure on the North Sea operators and threatens important production from the area.
Companies such as FTSE 100-listed oil majors BP PLC and Royal Dutch Shell PLC have already reduced investment and cut jobs in the North Sea, with drilling service company Archer slashing 400 jobs earlier this year alongside press speculation that international firms like ConocoPhilips are mulling the potential sale of assets in the region.
The UK government has attempted to quell reduced investment and issues in the North Sea by pledging four measures that would offer GBP1.3 billion of support to the UK oil and gas industry, primarily in the UK North Sea which would lead to production being boosted by 15% before the end of 2020.
UK coal production has a similar story, falling 10.6% in 2014 to 7.2 million tonnes of oil equivalent from 8.0 million tonnes in 2013. In 2010, coal production stood at 11.5 million tonnes.
Nuclear power also fell by 9.7% to 13.9 million tonnes of oil equivalent from 15.4 million tonnes in 2013, after production remained fairly stable between 2011 and 2013.
On the flip side, UK gas production rose in 2014 by a fraction to 36.6 million tonnes of oil equivalent from 36.5 million tonnes, marking the first increase in production since 2000.
Bio-energy and waste production rose to its highest level of 7.9 million tonnes of oil equivalent, up 14.1% in 2014 from the 6.9 million tonnes of oil equivalent in 2013. Production has steadily risen year-on-year from only 5.2 million tonnes in 2010.
Wind, natural flow hydro and solar PV production in the UK rose to its highest level of 3.57 million tonnes of oil equivalent, marking the biggest year on year rise of 17.9% from the 3.02 million tonnes produced in 2013. This too has steadily increased every year from 1.19 million tonnes in 2010.
The UK's net import dependency for energy fell by 8.1% to 163.5 million tonnes of oil equivalent, suggesting the UK imported just under 60% of its energy in 2014. However, exports fell by 7.9% to 70.3 million tonnes which was its lowest level since 1980, according to the Department. These
falls have resulted in net import dependency decreasing by 1.1 percentage points from 2013 to
stand at 46%.
The UK's dependency on fossil fuels has also fallen as a result of the ever-changing energy mix, falling to an 84.6% dependency in 2014, down 1.6 percentage points from 2013 which the Department called a "record-low".
Looking past 2014, in the period between December and February UK energy production fell 2.7% from the same period a year earlier driven mainly by reduced oil and gas production in the UK Continental Shelf in the North Sea. Coal production also fell as more plants closed amid pressure on the commodity. Nuclear production rose by 5.1% as stations return to normal operations after outages, said the Department.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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