Study: Without UK renewables LNG imports would cost £30bn more


The government is being urged to ramp up efforts to end the UK’s dependence on gas shipments following a new analysis which details how Liquified Natural Gas (LNG) imports would need to rise by more than 150 per cent at a cost of £30bn to billpayers if the UK was not generating electricity from renewable sources.

The recent surge in wholesale power prices that has been driven by soaring gas prices has prompted some politicians and media commentators to erroneously blame the net zero transition for rising energy costs and call on the government to reduce its reliance on renewables.

But fresh analysis from trade body RenewableUK highlights that how renewables are serving to curb demand for gas that would otherwise have to be imported at huge cost to the UK. The new report shows how renewables projects generated 122 terawatt hours of power in 2021, equivalent to that provided by 144 per cent of the LNG the UK imported last year.

RenewableUK has estimated that replacing the electricity generated by renewables in 2021 would require an additional 21.2 billion cubic metres (BCM) of gas to be burned for power. Last year LNG imports totalled 14.7 BCM, and according to the analysis importing additional LNG to replace renewable generation would cost nearly £30bn at current prices of about 400p/therm.

This scenario would also make the UK reliant on imports for nearly four-fifths – or 78 per cent – of its gas.

Demand for LNG is rising following Russia’s decision to halt gas exports to Europe via the Nord Stream pipeline, which prompted gas prices to hit new record highs in recent weeks.

If the UK were to meet the demand covered by renewable energy without additional imports, RenewableUK has estimated that domestic gas production would have to rise by 65 per cent.

Earlier this month, the Government’s independent advisers on National Infrastructure and Climate Change wrote to new Prime Minister Liz Truss urging her to “double down” on “efforts to end our dependence on gas” and warning that “gas reserves – offshore or from shale – are too small to impact meaningfully the prices faced by UK consumers”.

At the same time, oil and gas representative body Ocean Energies UK has cautioned that increased UK gas production would not “swing prices back down to what they were a few years ago”.

“At a time of increasing concern about costs and security of supply, renewables are cutting our dependence on gas and avoiding huge additional energy imports,” said RenewableUK’s chief executive Dan McGrail. “As gas pipelines to Europe are being cut off by Russia, increasing demand for LNG is pushing up prices and the best way to avoid those costs is not using gas in the first place”.

McGrail cited the fact that North Sea gas producers have already increased output in response to higher prices but warned this “can only go so far”, as new gas fields can take decades to come online. Renewables, on the other hand, can provide power at prices that are more than five times cheaper than the price of gas and can be brought online in a fraction of the time, he said.  

“Our overreliance on gas has forced the government into a £100bn-plus subsidy for energy bills and gas prices remain sky-high going into winter,” McGrail added. “If we want cheaper, secure energy supplies, we need to make rapid progress on home-grown renewables and cut our reliance on expensive shipments of gas from across the globe.”

The report comes amidst speculation that today’s mini Budget from the government could include long-awaited moves to try and fast-track planning permission for new offshore wind farms, alongside plans for new oil and gas licenses for North Sea projects, as the government seeks to boost domestic energy generation.



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