The Great British Energy Emergency

A tale of two countries, one with an official energy emergency and one without.

This is the tale of two countries, one with abundant, cheap energy and the other with scarce, expensive energy, set to get more expensive and less plentiful. Yet, it is the first country that has declared an energy emergency and is pulling out all the stops to increase energy supply and bring down prices further. Of course, I am comparing the USA with the UK. Time to dig into the detail and make the case for the Great British Energy Emergency.

Energy Consumption

Figure 1 from Our World in Data (OWID) compares the energy use per capita of both the UK and USA.

Figure 1 - UK and US per Capita Energy Use

In 2023, US energy use per person was 2.7X that of the UK. Energy use per person peaked in both countries in 1973 and has declined since. However, UK energy use per capita has fallen by 40% over the period whilst US energy use has fallen by 21.5%. Since the 2008 Climate Change Act, UK energy use per capita has fallen 31.2% while US energy consumption has fallen by a more modest 10.8%.

Electricity Generation

A similar story emerges in Figure 2 that looks at electricity generation per capita.

Figure 2 - UK and US per Capita Electricity Generation

Again, the US produced nearly three times the amount of electricity per person than the UK in 2023. US electricity generation per capita peaked in 1999 at 14,099kWh/person, whereas UK generation peaked in 2003 at 6,676kWh/person. Since the respective peaks, US generation has fallen 11.4% while UK generation has fallen a massive 35.1%. Since the Climate Change Act of 2008, US generation has fallen 7% with UK generation per person has falling by 31.2%. The US is already far more abundant in energy and electricity than the UK.

Carbon Intensity

Despite producing and consuming far more energy per capita than the UK, the carbon intensity of America’s energy production is not that different to ours, as shown in Figure 3.

Figure 3 - UK and US CO2 Intensity Per Unit of Energy

In 2023, the US produced 0.19kg of CO₂ per kilowatt-hour of energy produced, whereas the UK produced 0.16kg/kWh. The carbon intensity of both countries is falling, but UK carbon intensity has fallen much more rapidly since 2010. However, the UK figures are probably flattered by not counting the emissions from biomass power plants burning trees to produce electricity.

Energy Prices

We have covered the UK’s expensive energy prices when compared to others in the IEA and EU before. However, Figure 4 simply compares UK industrial electricity and gas prices with the US.

Figure 4 - UK and US Industrial Energy Prices

UK gas prices were competitive with the US until the late 2000’s but since then UK prices have soared, with US prices remaining at a stable low level until the energy crisis of 2022. US prices in 2023 dipped back into the range that started in 2005. In 2023, UK gas-prices were 4.6X those of the US.

Although UK electricity prices have been above those of the US for the whole period from 1998, they were at least competitive up to 2004. Since then, UK prices have soared while US prices have taken a much gentler path upwards. In 2023, UK industrial electricity prices were 2.7X those of the US.

Economic Impact

The economic impact of high energy prices and reduced energy use could not be clearer as shown in Figure 5, again from OWID.

Figure 5 - China, UK, US and World Energy Use Per Person vs GDP Per Capita

Since the Climate Change Act came into force in 2008, the UK’s energy consumption per capita has fallen by >2% per year and GDP per capita has virtually stagnated. America has shrunk energy consumption more slowly and although it has enjoyed faster growth than the UK, US growth has been lower than the world average and much slower than China, where energy consumption per person has increased by >3% per year.

The US as a whole has GDP per capita some 38% above the UK. In fact, Mississippi, the USA’s poorest state, has a higher GDP per person than the UK, France, Italy and Spain and is closing in on Germany. Energy austerity is leading to stagnation and poverty.

US Energy Policy

Despite the US having much stronger growth and higher GDP per capita than the UK as well as consuming far more energy than the UK and benefitting from much lower energy prices, President Trump has declared a national energy emergency. The announcement says:

“We need a reliable, diversified, and affordable supply of energy to drive our Nation’s manufacturing, transportation, agriculture, and defence industries, and to sustain the basics of modern life and military preparedness. Caused by the harmful and short-sighted policies of the previous administration, our Nation’s inadequate energy supply and infrastructure causes and makes worse the high energy prices that devastate Americans, particularly those living on low- and fixed-incomes.”

“An affordable and reliable domestic supply of energy is a fundamental requirement for the national and economic security of any nation.”

“The policies of the previous administration have driven our Nation into a national emergency, where a precariously inadequate and intermittent energy supply, and an increasingly unreliable grid, require swift and decisive action. Without immediate remedy, this situation will dramatically deteriorate in the near future due to a high demand for energy and natural resources to power the next generation of technology.”

The US is going to stretch every sinew to increase oil and gas production; in short, drill, baby, drill. The declaration of an energy emergency in the US, comes despite the US being by far the largest producer of oil in the world.

The US is not just focusing on hydrocarbon energy either. Under the Biden Administration, the US Energy Department published their Nuclear Liftoff report that called for their civil nuclear fleet to triple to 300GW by 2050, stating that building out nuclear power reduces the need for storage and extra transmission capacity. The full report notes the US would have to expand Uranium mining and milling capacity and conversion and enrichment capacity would need to increase substantially too. The Trump administration has also announced a moratorium on offshore wind leases.

Part of the reason for declaring an energy emergency is the immense power requirements of Project Stargate, a $500bn investment in huge AI datacentres. The vision for Stargate is that they will eventually need massive 5GW data centres, each one would require the equivalent output of 1.5-2 Hinkley Point C nuclear power plants.

Trump and his advisors have realised that cheap, abundant and reliable energy is fundamental to economic prosperity.

UK Energy Policy

Sadly, UK policymakers have not read that memo. The contrast between US and UK energy policy could not be starker. Quite astonishingly, instead of increasing our energy consumption, the miserabilist Malthusians at NESO want to cut our per capita energy consumption in half by 2050 (see Figure 6).

Figure 6 - NESO Propose Halving Per Capita Energy Consumption by 2050

Of course, the ideologues at the Climate Change Committee want us to accelerate even faster down the road to serfdom. Ed Miliband’s Clean Power 2030 plan will make us ever more reliant upon interconnectors and intermittent renewables and calls for a 20% cut in residential electricity demand by 2030. That strategy did not work out too well when we came within a whisker of blackouts last month. Norway is getting so fed up with the impact interconnectors are having on its domestic energy prices, its Government fell last week. The UK Government has effectively banned new exploration and development of oil and gas resources in the North Sea and the moratorium on fracking remains in place. Just the other day, plans to drill the Rosebank and Jackdaw oil and gas fields were thwarted in court. DESNZ has not announced the results of the Small Modular Reactor competition and appears to be on a go slow when it comes to the wider nuclear power programme. Mad Miliband has also ordered that our Plutonium stockpile be buried instead of being converted into fuel for advanced fast reactors.

Moreover, in answer to a question in the House of Lords, Chris Stark, Head of Mission Control for our energy transformation is “sceptical about some of the future projections for the increase in power demand” for AI. Notwithstanding the apparent efficiency gains of China’s DeepSeek, he seems blissfully unaware that just one of the 5GW leviathans mentioned above would consume over 70% of the 62TWh of electricity demand earmarked for datacentres by NESO in last year’s Future Energy Scenarios report.

In short, we face continued energy austerity that will stifle economic growth, kill-off our remaining energy intensive manufacturing and hamper our ability to compete in industries of the future. Moreover, we have lost our last remaining nitrogen fertiliser plant and when Port Talbot closes, we will have lost the ability to feed ourselves and make steel to defend ourselves.

Even though every single word of the justification for an energy emergency in the US is even more applicable to the UK, our energy policy is stuck in the Dark Ages. We need to declare a Great British Energy Emergency now. This would include:

1. Restoring hydrocarbon exploration and development in the North Sea, getting rid of the windfall tax and cutting taxes on oil and gas companies.

2. Stopping the development of any more subsidised intermittent renewables and exploring ways of reducing the subsidy burden.

3. Lifting the moratorium on fracking and even considering bringing back coal mining.

4. Building more gas-fired power plants, and if necessary coal-fired plants as well as removing the carbon tax on gas-fired generation.

5. Publish our own Nuclear Liftoff plan that must include overhauling and streamlining nuclear regulation, re-building the skills base, building large new reactors from Korea, accelerating Rolls Royce SMRs and Advanced Reactors that could use up spent nuclear fuel.

As Elon Musk recently said: in the limit, stupidity is indistinguishable from malice. Whether our politicians are stupid or malicious is unimportant; if we are to thrive as a nation, they need to change course to deliver abundant, cheap and reliable energy now.

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