Fiddling whilst the lights go out

The Department of Trade and Industrypublished the Energy Trends and Quarterly Energy Prices today :

TOTAL ENERGY: 2006

- Total production in 2006 was 196.4 million tonnes of oil equivalent, 8.8 % lower than 2005.
- Between 2005 and 2006 coal and other solid fuel consumption rose by 11.0 %
- Oil consumption increased by 1.1 %
- Gas consumption fell by 5.5 %.
- Primary electricity consumption decreased by 6.5 %.

COAL 2006

Annual coal production for 2006 was 18.6 Mn tonnes, 9.3 % down on production in 2005 at 18.6 million tonnes. Opencast production was down 17.3 per cent as sources declined in output.

- Imports of coal in 2006 were record level of 50.3 Mn tones , 14.3 per cent up on 2005
- Coal demand was 68.2 Mn tonnes up 10.2 %

OIL: 2006

- Compared with 2005, Total indigenous UK production of crude oil and NGLs in 2006 decreased by 76.6 mn tonnes = 9.6 %. Two new fields started production in 2006, but production from these new fields was insufficient to make up for the general decline in production from older established fields.

- The UK was a net importer of oil and oil products for the first time since 1980 by 6.6 million tonnes. In 2005 the UK was a net exporter by 2.4 million tonnes.

- Overall primary demand for oil products in 2006 was 0.4 per cent lower than in 2005.

- Deliveries of aviation turbine fuel increased by 0.1 %. Preliminary figures for 2006 suggest that motor spirit deliveries fell by 1.7 per cent whilst Derv (diesel) deliveries increased by 5.6%

GAS: 2006

- Total indigenous UK production of natural gas in 2006 declined by 8.6 % over 2005.
- Exports of natural gas in 2006 rose by 25.4 % compared with 2005 and imports increased by 40.8 %.
- Demand for gas in 2006 as a whole was 4.4 % down on 2005.

Gas use for electricity generation in 2006 was 7.5 % down on 2005.
- Provisionally, consumption in the domestic sector fell by 3.6 % in 2006 as a whole while consumption in the industrial sector fell 4.7 %.

ELECTRICITY: 2006

- Fuel used by generators in 2006 as a whole was, in total, 0.3 % lower than in 2005. (ie Static)
- The supply from coal in 2006 increased by 11.6 % (+14.9 TWh)
gas fired stations supply fell by 7.5 % (-11.2 TWh).
The supply from nuclear stations fell by 7.9 % (-5.9 TWh).
- Total electricity supplied by all generators in 2006 was 0.4 per cent lower (-1.7 TWh) than in 2005. (ie Static)

PRICES: QUARTER 4 2006

- Average industrial gas prices, including CCL were 14.9 % lower in real terms in Q4 2006 compared to Q4 2005.
- Average industrial electricity prices including CCL were 14.6 % higher, in real terms, in Q4 2006 compared to Q4 2005.
- Estimates suggest that in January 2007, industrial gas and electricity prices in the UK including taxes were above the EU15 median for all size bands of consumers.
- In mid March 2007, unleaded petrol was on average 88.5 pence per litre, a decrease of 1.0 pence per litre compared to a year earlier.
- In mid March 2007, diesel was, on average, 92.2 pence per litre, 1.6 pence per litre lower than a year earlier.
- Provisional Q4 2006 data shows that the price paid for all fuel and light by household consumers has risen by 26.4 % in real terms between Q4 2005 and Q4 2006.
- Domestic electricity prices, including VAT, in Q4 2006 were 24.3 % higher in real terms than in Q4 2005. The price of domestic gas rose by 37.6 % in real terms over the same period, whilst the price of heating oils fell by 6.9 %.

- 2006 figures for household bills suggest that an average standard credit electricity bill increased by £53 compared to 2005 bills. Bills for direct debit and pre-payment customers increased by £44 and £55 respectively.

- For gas, 2006 bills suggest that an average standard credit bill rose by £87 compared to average 2005 bills. Comparable changes for average direct debit and pre-payment bills were increases of £71 and £97 respectively.

- Combined gas and electricity standard credit bills have increased by about 18.0 per cent in real terms, and 20.9 per cent in cash terms, between 2005 and 2006.

- The Energy White Paper, published in February 2003, defined four goals for energy policy, the first of which was to put ourselves on a long term path to reduce the UK's CO2 emissions by 60 per cent by 2050; this target was emphasised in the 2006 Energy Review, and the draft Climate Change Bill published in March 2007 proposed that the 60 per cent target would be legally binding.

- Final energy consumption increased by 9.5 % between 1990 and 2006 compared with a GDP increase of 47 % over the same period.

- Energy consumption did not change at the same rate as GDP due (says the DTI) to:
1. Improvements in energy efficiency
2. Fuel switching
3. A decline in the relative importance of energy intensive industries
4. Demand for space heating does not increase in line with output.
...ie no mention of cost increases.

Energy Trends and the Quarterly Energy Prices bulletins, published quarterly, are available in hard copy from DTI on subscription, price £40 per annum and on the internet at

It is evident that UK electricity producers are sweating their coal burning assets whilst they can and that the consumers both commercial and domestic have been jolted into more efficient energy use by the dramatic rise in price.

Natural gas and oil assets continue - like coal (open cast production declined) to decline at a masive rate. This cold and lonely island on the Western fringe of Europe, hads to importing more and more energy either as gas by tanker or pipeline, oil or coal. Whilst people worry about the impact of carbon emissions on the economy over the next 40 years, the impact on the balance of payments, competitiveness of UK industry and the cost of living - especially of the ageing population ,is, it appears, of little concern.

Fiddling whilst the lights go out.