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End of an era series: Britain's energy transition and its implications

On 30 September 2024 the UK’s last coal-fired power plant, Ratcliffe-on-Soar in Nottinghamshire, powered down for the last time, ending the country's 142-year history of coal-fired electricity generation. While this milestone was widely celebrated as a triumph for the UK’s climate policy, it has also triggered questions about the pace of this transition, its impact on global carbon emissions, and the true meaning of reaching "net zero." As the UK shifts to a higher renewable energy mix, it increasingly relies on imported natural gas. This raises concerns about energy security, economic costs, and whether the strategy has genuinely contributed to global emissions reduction.

Offshoring the UK's carbon emissions

Closing coal power plants like Ratcliffe has led to a steep decline in the UK’s domestic carbon emissions. Since 2012, coal’s share of the UK’s electricity generation has plummeted from around 40% to less than 2% in 2024. Energy Performance Certificate ratings for commercial property have improved without any upgrading required.

The carbon savings from these changes are significant, with the UK’s overall greenhouse gas emissions dropping by more than 44% between 1990 and 2022, according to the Department for Business, Energy & Industrial Strategy (BEIS). On paper, this shift positions the UK as a leader in climate action.

However, these domestic reductions do not paint the full picture. While the UK’s in-country emissions have decreased, its consumption-based emissions—including those generated by producing goods imported into the UK—have not fallen as sharply.

According to research by the Carbon Trust, around 46% of the UK’s total carbon footprint in recent years has been attributed to imported products, ranging from electronics to clothing, much of which is manufactured in countries where coal still dominates the energy mix, such as China and India.

This phenomenon, often called "carbon leakage" or "offshoring emissions," means that while the UK’s domestic carbon footprint has shrunk, a significant portion of its consumption-based emissions remains tied to carbon-intensive processes abroad.

The UK's demand for imported goods has contributed to high CO₂ emissions in other countries, offsetting the domestic gains. Critics argue that while this strategy may improve the UK’s statistics, it does little to reduce overall global emissions.

The financial costs of the fossil fuel phase out

The UK’s move away from coal has been costly in more ways than one. The transition to renewables like wind and solar has led to a significant drop in the country’s carbon emissions, it has also created new financial burdens, mainly through increased reliance on imported natural gas.

Source: Compliled from data provided by the Office of National Statistics

Chart source data: BEIS, OEUK (Offshore Energies UK), Office for National Statistics, International Energy Agency.

When North Sea gas production began to decline in the 2000s, the UK increasingly turned to imported Liquefied Natural Gas (LNG) to fill the gap, importing from countries such as Qatar, the United States, and Nigeria. LNG is often more expensive than domestically produced gas, as it requires energy-intensive processes of liquefaction, transportation, and regasification before it can be used. According to the National Grid, the UK imported over 25% of its natural gas needs in 2023, a significant portion of which was LNG.

The costs of these imports have fluctuated, but the spike in gas prices following Russia’s invasion of Ukraine in 2022 sent UK energy prices soaring. Since then, the UK government has subsidised energy bills for households and businesses, costing the taxpayer a significant amount. This financial strain has raised questions about the prudence of relying heavily on imported LNG rather than investing further in domestic production or accelerating renewable capacity.

Has the transition away from fossil fuels been too fast?

The rapid pace of coal plant closures, combined with the decline of domestic gas production, left the country vulnerable to the shocks of the global energy market. When Russian gas exports to Europe were disrupted, the UK, like many of its European neighbours, faced an energy supply crunch that a more gradual transition strategy could have mitigated.

Critics suggest that the rush to meet ambitious climate targets without a fully developed renewable infrastructure has resulted in higher energy costs, increased reliance on fossil fuel imports, and potential risks to energy security. For instance, the UK’s offshore wind industry, while world-leading, still faces challenges such as grid integration, the need for energy storage solutions, and slow progress on new projects due to permitting delays.

Energy security

By 2030, without additional investment the UK will have to import around 80% of its gas and 70% of its oil.

OEUK
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