UK’s energy system loses 54 per cent of generation

The UK’s energy system loses over half of its generated power from source to end user at a cost of £9.5 billion a year, making it one of the least efficient grids in Europe reports Jillian Ambrose in Utility Week.

The new findings come amid growing calls for the government to address the UK’s “energy productivity” as a more cost-effective way of tackling the energy trilemma of supply, cost and decarbonisation.

The research – led by the Association for Decentralised Energy (ADE) – found that £3 billion of energy could be saved if action was taken, which could cut consumer electricity bills by £116 a year.

ADE chief executive Tim Rotheray urged the government to focus on how it could support investment in cutting energy waste, saying the unnecessary impact on consumer bills was a “national embarrassment”.

“Wasted energy reduces our productivity, undermines efforts to create a competitive economy on a global level and causes unnecessary emissions,” he said.

Addressing energy waste would require a fresh approach to power generation, transmission and distribution, and energy efficiency in homes and businesses, the report said.

Recovering heat from power stations could save £2 billion a year alone, but currently only 10 per cent of power plants do so.

In terms of network efficiency, the UK lags behind competing European economies, including Germany and Denmark. While the UK loses almost 8 per cent of its energy through transmission and distribution, Denmark loses just over 7 per cent and Germany 3.9 per cent.

“If UK transmission and distribution losses were equivalent to those in Germany, the best in Europe, energy users would save £605 million a year, the equivalent of £23 per household,” the report said.

The UK’s regulated networks are required to reduce losses by Ofgem, which can reward network companies by up to £32 million over the next five years. But the report notes that the UK’s capacity market is funded by almost £1 billion, dwarfing the government’s efforts to tackle energy waste.