The UK energy industry is a private industry comprised of many distinct subsectors responsible for: energy generation; transmission and distribution; energy supply and regulation.  

In 2014, the UK energy market:

  • Supplied energy to over 26 million homes and every business in Britain
  • Employed over 680,000 people
  • Invested £13.1 billion in infrastructure
  • Contributed £5.7 billion to the UK Treasury  

Electricity Generation  

In the UK, our electricity is generated in a number of different ways:  

Fossil Fuels  

The majority of the UK’s electricity is produced by burning fossil fuels, mainly natural gas (47% in 2010) and coal (28%). A very small amount is produced from oil (under 1%).  


Currently 16% of the UK’s electricity comes from nuclear reactors. The UK’s nuclear power stations will close gradually over the next decade or so, with all but one expected to stop running by 2025. A new generation of reactors is under construction, the first of which could be running by 2018.  

Renewable Energy  

Renewable technologies include: wind, wave, marine, hydro, biomass and solar, and make up approximately 7-9% of current UK energy generation. This will rise as the UK aims to meet its EU target of generating 30% of its electricity from renewable sources by 2020.  

Energy Policy  

UK energy policy is set out in the Energy white paper of May 2007 and Low Carbon Transition Plan of July 2009. The 2007 white paper: “Meeting the Energy Challenge” sets out the government’s international and domestic energy strategy to address the long-term energy challenges faced by the UK, and to deliver four key policy goals:

  • To put the UK on a path to cut carbon dioxide emissions by some 60% by about 2050, with real progress by 2020
  • To maintain reliable energy supplies
  • To promote competitive markets in the UK and beyond, helping to raise the rate of sustainable economic growth and to improve productivity
  • To ensure that every home is adequately and affordably heated  

The scope of energy policy includes the production and distribution of electricity, transport fuel usage, and means of heating (significantly natural gas). The policy recognises: energy is essential in almost every aspect of our lives and for the success of our economy. We face two long-term energy challenges:

  • Tackling climate change by reducing carbon dioxide emissions both within the UK and abroad
  • Ensuring secure, clean and affordable energy as we become increasingly dependent on imported fuel  

Sources of Further Reading: 

The Department of Energy & Climate Change (DECC) works to make sure the UK has secure, clean, affordable energy supplies, and promotes international action to mitigate climate change. Its priorities are:

  • Supporting investment in the UK’s energy infrastructure
  • Supporting consumers and keeping energy bills down, including implementation of the Green Deal
  • Promoting action in the EU and internationally to maintain energy security and mitigate dangerous climate change as we chart the way towards a global deal on climate change in 2015  

Energy UK is the trade association for the UK energy industry, representing over 80 suppliers and generators of electricity and gas for domestic and business consumers. Its members represent the truly diverse nature of the UK’s energy industry – from the UK’s largest energy firms to new, growing suppliers and generators, now making up over half of our membership.  

Renewable UK is the UK’s leading renewable energy trade association. Its vision is for renewable energy to play a leading role in powering the UK and for its members to be integral in achieving this goal.  

Further information on Scotland's oil and gas and renewables sectors can be found at SCDI.