Policy paper

Statutory security of supply report: 2011

This publication was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Annual report to Parliament on the availability of electricity and gas for meeting the reasonable demands of consumers in Great Britain.

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Detail

The government and Ofgem are required to report annually to Parliament on the availability of electricity and gas for meeting the reasonable demands of consumers in Great Britain.

This is the second annual report of this title [previously known as ‘Energy markets outlook’]. This is a technical report focusing on gas and electricity. Other fuels (coal, nuclear fuel, renewables) are also mentioned in the electricity chapter in the context of electricity generation. A chapter on oil is included for completeness though not a statutory requirement.

The projection of peak demand for electricity remains at 60GW whilst generation capacity stands at 90.2GW. However, the coming decade will see many changes in the electricity markets, with the closure of a number of coal and oil fired plant that are considered too polluting by modern standards, and nuclear plant that are scheduled to come to the end of their working lives.

New plant being built or going through the planning process, and renewable projects will replace the capacity due to close with cleaner technologies, enhance security of supply. The security of gas supply is in the short to medium term broadly benign in the near term, though it is not risk-free. It is the medium to long term that will be challenging.

Whilst UK production is forecast to decline, there is an increasingly large and diverse range of import sources on which to draw. The report also looks at the security of supply of oil. Transport accounted for 75 per cent of final consumption of oil products in 2010.

Significant reductions in oil demand are not expected over the next 20 years as the transport sector is the main consumer of oil and will continue to be heavily dependent on it over this period. UK oil production is declining and oil imports are forecast to increase in response to this decline.

This paper was laid before Parliament in response to a legislative requirement or as a Return to an Address and was ordered to be printed by the House of Commons.