COMMISSION STAFF WORKING DOCUMENT Country Factsheet United Kingdom Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN INVESTMENT BANK State of the Energy Union
Date: 2015-11-18
Institutions: European Commission, Secretariat-General
Subjects: United Kingdom, competitiveness, economic and social cohesion, electrical energy, energy policy, gas, innovation, reduction of gas emissions, regional cooperation, single market

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 18.11.2015  SWD(2015) 242 final   COMMISSION STAFF WORKING DOCUMENT Country Factsheet United Kingdom Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN INVESTMENT BANK State of the Energy Union {COM(2015) 572} {SWD(2015) 208 à 209} {SWD(2015) 217 à 241} {SWD(2015) 243}  
 
 
Towards an Energy Union  
         United Kingdom  

Macroeconomic relevance of energy 

IMPORTANCE OF THE ENERGY SECTOR 

The UK energy sector has a much lower weight in the national economy than on average in the EU, 
both measured in terms of value added and jobs. The increase in the UK energy sector's employment 
has  been  much  larger  than  elsewhere  in  the  EU,  leading  to  a  strong  rise  in  its  share  in  total 
employment. Reportedly, most additional jobs are in the electricity and renewable sectors.  

Source: EUROSTAT – National Accounts 

According to EurObserv'ER, in 2013, the share 
of  direct  and 
indirect  renewable  energy 
related  employment  in  total  employment  of 
the  economy  in  the  United  Kingdom  was  at 
about 0.33%, below the EU average of 0.53%. 

Source:  European  Commission,  based  on  EurObserv'ER  and 
EUROSTAT 

TRADE BALANCE OF ENERGY PRODUCTS 

The UK's dependence on imported energy products is significantly smaller than for the whole EU but 
it  is  increasing  from  a  low  level,  mainly  reflecting  the  decline  of  UK's  North  Sea  oil  and  gas 
exploitation. This has contributed to the widening of the UK's current account deficit over the 2006-
2014 period. 

012345620052011UKEU27Value added of energy sector% of grossvalue added (total economy)0.00.10.20.30.40.50.620052012UKEU27Employment in energy sector% of total employment 
 
 
 
 
 
 
 
 
 
 
 
 
Towards an Energy Union – United Kingdom 

Source: EUROSTAT 
Note: Current account balance for EU28 from European Commission (AMECO) 

1. Energy Security, solidarity and trust 

ENERGY MIX 

The energy mix of the United Kingdom is different from that of the whole EU28 insofar as the share 
of  gas  is  higher  and  the  shares  of  renewable  energy  and  nuclear  are  considerably  smaller.  It  has 
similar shares of petroleum and coal to that for the whole EU-28. Since 1995, the share of renewable 
energy has increased by more than the EU average (from less than 1% to 5% of gross inland energy 
consumption),  while  the  share  of  nuclear  decreased  by  1  percentage  point.  The  biggest  decrease 
however was in terms of the share of petroleum products (4 percentage points). 

The  share  of  nuclear  energy  in  the  UK's  energy  mix  is  set  to  increase,  as  industry  is  planning  to 
develop  approximately  16GW  of  new  nuclear  power.  This  will  replace  the  current  generation  of 
nuclear reactors which produce around 18% of the UK’s electricity and are set to be decommissioned 
by 2030.  

Gross inland energy consumption in 2013  

Source: European Commission, based on EUROSTAT  

IMPORT DEPENDENCY 

The  UK's  import  dependency  is  below  that  of  the  EU  as  a  whole.  However,  it  has  increased 
significantly  over  the  last  few  years.  In  particular,  the  UK  changed  from  being  a  net  exporter  of 
petroleum  products  in  2005  to  importing  40%  of  its  consumption  in  2013.  It  also  went  from 

2 

-6-4-202UKEU28% of GDPCoalOilElectricityGasC. A. BalanceTrade balance of energy product and currentaccount balance, 2006 -6-4-202UKEU28% of GDPCoalOilElectricityGasC. A. BalanceTrade balance of energy product and currentaccount balance, 2014  
 
 
 
 
 
 
 
 
 
Towards an Energy Union – United Kingdom 

importing only 7% of its gas needs to importing 50% of them by 20131. However, gas import sources 
are well diversified, in particular relative to other EU countries. The UK also benefits from diverse and 
extensive gas import infrastructure. In total, the UK has 25% of the EU’s LNG import capacity. Overall, 
the energy supplier concentration index is low for the UK, showing well balanced import sources and 
energy mix.   

Source: European Commission, based on EUROSTAT  

2. A fully-integrated internal energy market 

INTERCONNECTIONS 

European Commission based on ENTSO-E scenario 
outlook and adequacy forecast 2014 

Source: 

Note:  Reference  to  2030  target  is  based  on 
October  2014  European  Council  conclusions 
stating  that  "the  Commission  will  also  report 
regularly  to  the  European  Council  with  the 
objective of arriving at a 15% target by 2030" 

facing 

If  all  are 

The level of electricity interconnection was 6% in 2014 for 
the UK which, although low by EU standards, reflects the 
particular  challenges 
island  markets.  As  a 
consequence  of  this  level  of  interconnection  and  the 
structural price difference with the continent, the existing 
interconnections are highly congested. To address this, a 
number  of  electricity  infrastructure  Projects  of  Common 
Interest (PCIs) involving the UK were selected, which will 
improve  interconnection  with  Belgium,  France,  Ireland 
and  Norway. 
implemented  according  to 
schedule,  they  will  allow  the  UK  to  achieve  the  10% 
interconnection target for 2020. Further efforts would be 
needed to achieve the 2030 target of  15%; however the 
need  for  this  objective  will  be  established  on  a  case-by-
case  basis  and  considered  alongside  costs  and  the 
potential for commercial exchanges.   
The  British  gas  system 
interconnected  with 
Belgium  (two-way  physical  flows),  the  Netherlands  as 
well  as  with  Northern  Ireland  and  Ireland  to  the  west 
(export only). A number of gas PCIs were identified, with 
the  aim  to  allow  bidirectional  flows  between  Great 

is  well 

1  

Top non-EU gas suppliers table is based on EUROSTAT data. The share of imports from non-EU countries is calculated 
as the ratio between volumes of imports from that specific non-EU supplier and total imports  (from EU and non-EU 
countries). 

3 

Top non-EU gas suppliers in 2013 (% in total imports)United KingdomEuropean Union country[%]country[%]Norway57.3Russia39.0Qatar17.8Norway29.5Algeria9.7Qatar6.713%46%-3%40%7%50%52%53%82%87%57%65%200520132005201320052013All fuelsPetroleum andproductsNatural gasUKEU28Import dependency 2013 
 
 
 
 
 
                                                                 
Towards an Energy Union – United Kingdom 

Britain, Northern Ireland and Ireland.  
Overall 26 PCIs involving the UK have been identified, of 
which 21 for electricity, 4 for gas and one for smart grids. 

ELECTRICITY AND GAS MARKETS 

Market concentration index for power generation (left) 
and gas supply (right) (2013) (Herfindahl index – 10000 
means monopoly) 

Sources:ESTAT and European Commission Calculations 

Sources: European Commission based on ESTAT, CEER and Platts 
Power Vision 

Concentration  of  the  electricity  generation  market  in  the  UK  is  low,  especially  relative  to  the  EU 
average. However, in response to concerns specifically about market liquidity, Ofgem obliged the six 
largest  vertically-integrated  suppliers  to  publish  prices  at  which  they  will  buy  and  sell  a  range  of 
forward  power  products.  It  also  requires  the  eight  largest  generating  companies  to  follow  certain 
specific rules when trading with small independent suppliers. 

Gas market concentration in the UK is also low, with the largest market share of physical and traded 
activity  below  8%.  The  wholesale  gas  market  includes  both  over-the-counter  and  exchange  based 
trading (ICE and ICE Endex).   

Wholesale electricity prices are above the EU average while wholesale gas prices are below the EU 
average. At retail level, six major suppliers share 90-95% of the market. The price paid by domestic 
customers  for  electricity  and  gas,  including  all  taxes  and  levies,  is  below  the  EU28  average.  This  is 
due, at least in part, to a 5% VAT rate for domestic energy supplies. 

The  government  has  committed  to  replacing  all  gas  and  electricity  meters  with  smart  meters  in 
domestic households in Great Britain by the end of 2020. Roll-out is underway with over 1.5 million  
smart and advanced  meters installed  as of March 2015). 

Both  markets  have  above  average  scores  for  choice  of  providers  and  actual  switching  rates2. 
However the ability of consumers to understand and choose the most appropriate tariff has been a 
concern  in  the  UK.  The  UK  Competition  and  Markets  Authority  is  currently  investigating  energy 
markets (electricity and gas, wholesale and retail; a final report should be available by mid-2016). 

According to an EU-wide survey, both the UK's electricity and gas markets have very poor scores in 
terms of overall consumer satisfaction. In 2014, Ofgem introduced a number of measures to enhance 
price  transparency  for  customers  to  address  concerns  regarding  the  ability  of  customers  to 
understand and choose the most appropriate tariff. As a result, suppliers can offer no more than 4 
tariffs  for  electricity  and  gas  (8  in  total)  and  must  inform  customers  how  much  money  they  could 
save if they switched to the supplier's most advantageous tariff. 

2  
http://ec.europa.eu/consumers/consumer_evidence/consumer_scoreboards/10_edition/index_en.htm 

10th Consumer Markets Scoreboard (June 2014),   

4 

 
 
 
 
 
 
 
 
 
 
 
 
 
                                                                 
Towards an Energy Union – United Kingdom 

Electricity Market Reform in the UK 

The  UK  has  undertaken  a  reform  of  its  electricity  market,  with  the  intention  to  deliver  low  carbon 
energy  and  reliable  supplies,  while  minimising  costs  to  consumers.  The  UK's  Electricity  Market 
Reform  (EMR)  has  introduced  two  key  mechanisms  to  provide  incentives  for  the  necessary  
investment required in  energy infrastructure:  

  Contracts  for  Difference  (CFD)  are  aimed  at  providing  long-term  price  stabilisation  to  low 
carbon plants, allowing investment to come forward at a lower cost of capital and therefore 
at a lower cost to consumers.  

  The  Capacity  Market  is  aimed  at  providing  a  regular  retainer  payment  to  reliable  forms  of 
capacity (both demand and supply side), in return for such capacity being available when the 
system is tight. 

CONTRIBUTION OF ENERGY TO CONSUMER PRICE EVOLUTION 

The contribution of the energy component to the increase of consumer prices in the UK has been 
similar than that for the EU as a whole.  

Source: DG ECFIN based on Eurostat 

VULNERABLE CONSUMERS 

Based  on  a  EUROSTAT  survey  on  income  and 
living  conditions,  three  proxy  indicators  are 
used  to  consider  fuel  poverty.  They  indicate 
that fuel poverty in the UK is in line with the 
EU  average.  The  UK  is  among  the  few  EU 
countries  with  a  clear  fuel  poverty  definition 
and related strategy and programmes to deal 
with  it.  There  are  a  number  of  measures 
targeted at vulnerable customers through the 
benefits  system  and  a  universal  Winter  fuel 
payment to older people. Also, suppliers must 
take 
avoid 
disconnecting certain categories of vulnerable 
customers in winter time.  

reasonable 

steps 

all 

to 

Source: European Commission, based on on EUROSTAT SILC survey 

5 

-101234520052007200920112013% increase on a year earlierNon EnergyEnergyAll itemsUnited Kingdom : Price evolution & the contribution of energy prices-10123420052007200920112013% increase on a year earlierNon EnergyEnergyAll itemsEU28 : Price evolution & the contribution of energy prices 
 
 
 
 
 
 
 
 
 
 
 
 
Towards an Energy Union – United Kingdom 

3. Energy Efficiency and moderation of energy demand 

ENERGY EFFICIENCY TARGET 2020  
(177.6 Mtoe primary energy and 129.2 Mtoe final energy) 

primary 

The  UK’s  2020  energy  efficiency  target 
for 
consumption 
energy 
amounts  to  177.6  Mtoe,  (129.2  Mtoe 
expressed  in  final  energy  consumption). 
Primary  energy  consumption  has  been 
decreasing significantly since 2005. While 
the UK is (currently) on track to reach its 
2020 energy efficiency target, the level of 
ambition  will  need 
fully 
maintained. Given the ongoing review of 
and 
energy 
programmes, 
to  be 
carefully managed 

policy 
this  will  need 

efficiency 

to  be 

 Source:  European  Commission,  based  on  EUROSTAT  and  on  national  energy 

efficiency targets as declared by the MS under the Energy Efficiency Directive 

ENERGY INTENSITY 

The primary energy intensity of the UK's economy has decreased since 2005 at a slightly faster rate 
than  the  EU  average.  It  remains  well  below  the  EU  average.  The  energy  intensity  reduction  of  UK 
industry has been in line with the EU average.  

Primary energy intensity of the economy      

Final energy intensity in industry 

Source:  European  Commission  based  on    EUROSTAT  and  European 
Commission /AMECO 

Source: European Commission based on  EUROSTAT and European 
Commission /AMECO 

Relative  energy  consumption  by  households  was  at  the  same  level  as  the  EU  average  in  2013  and 
decreased  at  a  faster  pace  since  2005.  The  specific  energy  intensity  of  passengers  cars  remains 
slightly  above  the  EU  average,  while  the  specific  energy  intensity  for  freight  transport  increased 
between  2005-2010,  (i.e.  from  the  same  unit  of  energy  fewer  tonnes  of  goods  are  transported 
and/or transported over shorter distances or the load factors of goods in freight vehicles are lower). 

6 

 
 
 
 
 
 
 
 
 
 
 
 
Towards an Energy Union – United Kingdom 

Final energy consumption per m2 in 
residential sector, climate corrected 

Specific energy intensity for passenger cars and freight 
transport3  

Source: European Commission based on  Odyssee 

database 

Source: PRIMES model background data and estimations based on EU 
Commission and EU MS inputs   

EU  legislation  sets  mandatory  CO2  emission  reduction  targets  for  new  cars  and  vans.  By  2021,  the 
fleet average to be achieved by all new cars is 95 grams of CO2 per kilometre. For new vans, the fleet 
average is set at 147 g/km by 2020. 

Source: European Environmental Agency. 2014 values are provisional. 2013 EU average refers to EU-27. 

Regarding transport performance, in EU-28 the inland freight modal shares are 71% by road, 17% by 
rail, 7% by inland waterways and 5% by pipelines. The respective inland passenger modal shares are 
82% by private car, 9% by buses and coaches, 7% by railways and 2% by tram and metro.   

Modal shares UK 

Source: Eurostat and EU transport in figures 2015. Data refers to 2013. Modal shares based on tonne-kilometres for freight sector and 
passenger-kilometres for passenger sector, freight data based on activity within country territory. Estimates are made when data is missing. 

3  

Statistics  on  energy  demand  for  passengers  and  freight  transport  are  not  available  and  model  estimates  have  been 
used instead. These issues should be borne in mind when comparing energy intensity in freight or passenger transport 
between Member States, which should be regarded as merely indicative. 

7 

 
 
 
 
 
 
 
 
 
 
 
 
 
                                                                 
Towards an Energy Union – United Kingdom 

4. Decarbonisation of the economy 

NON-ETS GHG EMISSION REDUCTION TARGET 2020  
 (-16% by 2020 as compared to 2005 in the non-ETS sector) 

The  UK  has  decreased  its  emissions  by  16% 
between 2005 and approximated 2014 data. 
According  to  own  UK  2015  projections,  it  will 
over achieve its 2020 target by a 3% margin.  

Non-ETS Emissions 
(vs. 2005) 

Projections with 
existing measures 
2020 

Projections/proxy 

target 

-19% 

-16% 

Proxy 2014 

-16% 

-9% 

Source:  European  Commission    based  on  EEA.  Based  on  preliminary 
inventory data. 

ESD  (Effort  Sharing  Decision)  emissions  are  the  emissions  from 

sectors not covered by the EU ETS 

RENEWABLE ENERGY SHARE TARGET 2020 (15%) 

its 
The  UK  has  made  progress  towards  achieving 
renewable  energy  target  of  15%  by  2020.  In  2013,  its 
share of renewable energy reached 5.1% of final energy 
consumption,  compared  with  an 
interim  target  for 
2013/2014 of 5.4%. 

In  the  last  2  years,  the  UK  has  achieved  remarkable 
progress in terms of the share of renewables in electricity 
generation, with significant deployment of offshore wind. 
Therefore, more recent provisional data for 2014 suggest 
a  better  outcome  due  to  this  large  increase  in  the 
amount of renewable energy produced.  

With  the  actual  share  of  renewables 
in  electricity 
generation reaching 17.8% share in 2014, the UK is ahead 
of its planned RES-E growth.  

Source: European Commission based on  EUROSTAT 

GREENHOUSE GAS EMISSION INDICATORS 

 

 

In 2012,  greenhouse gas emissions from  buildings accounted for 37% of all UK greenhouse 
gas  emissions.  In  2014,  the  UK  has  put  in  place  several  measures  to  encourage  energy 
efficiency and renewable energy deployment in buildings.  
In 2014,  the  revenues from the auctioning of  ETS allowances amounted to  € 401.5  million. 
Whilst  the  auction  revenues  are  not  earmarked  for  specific  purposes,  UK  Government 
spending  on  energy  and  climate  policies,  including  funding  international  climate  change 
initiatives, was in excess of the auction revenues raised. 

8 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Towards an Energy Union – United Kingdom 

Largest Sectors of GHG 
Emissions in 2012(*) 

Energy/power industry  

Transport 

Industry  

Agriculture (incl. forestry & 
fishery) 

Residential & Commercial 

Waste  

UK 

34% 

20% 

16% 

10% 

16% 

4% 

EU 
Average 

33% 

20% 

19% 

12% 

13% 

3% 

GHG Emissions 

UK 

EU 

EU ETS auctioning  
revenues in 2014 (€ 
millions) 

Share of ETS emissions 
in 2013 

GHG emissions/capita 
(tCO2equivalent) in 
2013 

Carbon intensity of the 
economy in 2013 
(tCO2equivalent/(€ 
millions ) 

401.5 

3205 

39% 

42% 

9.01 

8.5 

305 

328 

Source: European Commission based on EEA  
(*)Sectoral breakdown of 2013 data not available 

ENERGY AND TRANSPORT TAXATION 

Energy and transport taxes as a share of GDP in the UK have reached slightly above the EU average.  
This  increase  resulted  from  the  combination  of,  on  the  one  hand,  a  modest  increase  in  the  GDP 
shares of both taxes on heat and electricity and in particular on transport vehicles and, on the other 
hand, a modest decrease in the GDP share of taxes on transport fuels.  

Source: Eurostat 

5. Research, innovation and competitiveness 

RESEARCH AND INNOVATION 

The UK is near the EU average, above the US and below Japan and South Korea in terms of the share 
of  public  support  allocated  to  research  and  innovation  in  the  field  of  energy  and  environment.  In 
terms of intensity of low-carbon technologies patents, the UK stands close to the US, but below the 
EU average and main worldwide partners. 

9 

0.01.02.03.0UKEU-28Energy & Transport related taxes % of GDP, 2005TransportvehiclesTransport fuelHeat &Electricity0.01.02.03.0UKEU-28Energy & Transport related taxes % of GDP, 2012TransportvehiclesTransport fuelHeat &Electricity 
 
 
 
 
 
 
 
 
 
Towards an Energy Union – United Kingdom 

Source: European Commission based on  EUROSTAT   

The UK is currently supporting development of CCS technologies through a £125m R&D programme. 
The Government is also aiding the development of the UK's first full scale CCS project(s) through its 
CCS Commercialisation Competition under which it is making available to the winning bid(s), a £1bn 
capital grant and operational support through a contract for difference.  

COMPETITIVENESS 

Real unit energy costs (% of value added) 

Real unit energy costs4 in the UK have increased 
to slightly above the US level, but have remained 
well below the EU average. The energy intensity5 
of the UK's manufacturing sector is slightly lower 
than in the EU, which is itself lower than the US.  

In the UK, the gas prices for industrial customers 
are below the EU average but still above those in 
the  US  and  Canada.  The  electricity  prices  for 
industrial  consumers  are  slightly  above  the  EU 
average  as  well  as  those  from  major  EU  trade 
partners.  

Source: European Commission 

Source: European Commission based on EUROSTAT and IEA 

4  
5  

This indicator measures the amount of money spent on energy sources needed to obtain one unit of value added. 
The  energy  intensity  presented  here  is  derived  from  Use  Tables  of  WIOD,  see  "Energy  Economic  Developments  in 
Europe SWD(2014)19". 

10 

6.09.58.28.913.28.89.213.78.00246810121416UKEU27US200020092011 
 
 
 
 
 
 
 
 
   
 
 
 
 
                                                                 
Towards an Energy Union – United Kingdom 

6. Post-2020 Energy and Climate policy Strategy  

COMPREHENSIVE MEDIUM TO LONG-TERM STRATEGY (post-2020) 
FOR CLIMATE AND ENERGY  

  The  Climate  Change  Act  2008  provides  a  long-term  framework  for  the  UK's  energy  and 
climate  policy.  It  includes  GHG  emission  reduction  targets  for  2050  (80%  cuts  from  1990 
levels)  and  requires  the  government  to  set  binding  5-year  carbon  budgets.  These  set  the 
trajectory  to  the  2050  target.  The  act  also  requires  the  UK  to  lay  out  policies  and  plans  to 
meet the carbon budgets, which currently run to 2027. 

  The 2011 “Carbon Plan - Delivering our Low Carbon Future” publication sets out how the UK 
will achieve this decarbonisation. The Carbon Plan will be updated after the UK sets the fifth 
carbon budget (2028-2032) in 2016 

  The  UK  Energy  Efficiency  Strategy,  published  in  2012  and  updated  in  December  2013,  sets 
out  key  energy  efficiency  policies  for  the  next  two  decades  but  does  not  include  targets 
beyond 2020.  

  The  2012  Energy  Security  Strategy  identifies  cross-cutting  risks  to  UK  energy  security,  and 

sets out all the actions the UK is taking to maintain the UK's energy supply. 

  The CCS Roadmap of April 2012 aims to create the right conditions for deployment of CCS in 
the  UK  by,  inter  alia,  developing  a  supportive  regulatory  framework  and  launching  a  CCS 
Commercialisation programme, alongside the Electricity Market Reform to ensure adequate 
support for all low carbon technologies. A policy scoping document published in August 2014 
seeks views on a possible phase 2 of CCS deployment in the UK (including a focus on CCS on 
industrial applications).  
Industry has set out plans to develop approximately 16GW of new nuclear power. This will 
replace  the  current  generation  of  nuclear  reactors  which  produce  around  18%  of  the  UK’s 
electricity  and  are  set  to  be  decommissioned  by  2030.  This  will  provide  a  reliable  and  low 
carbon base load alternative to fossil fuels.  

 

NATIONAL TARGETS, especially for 2030 

Objective, 2030-2050 

Targets 

GHG reduction  

(for 

Yes 
period 
2023-2027 
and 2050) 

Renewable energy  

No 

Energy 
savings 

Efficiency 

/ 

No 

Comments 
Legally  binding  target  to  reduce  the  GHG  emissions  by  at 
least  80%  below  base  year  levels  by  2050,  to  be  achieved 
through  action  in  the  UK  and  abroad.  The  fourth  carbon 
budget requires emissions to be reduced by 50% below 1990 
levels in the period 2023–27.  
No  specific  2030  RES  target  (but  UK  "committed"  to 
increasing renewables in its energy mix) 
No  specific  2030  energy  efficiency  target  (but  energy 
efficiency policies for the next two decades laid out in 2012 
Energy Efficiency Strategy). 

7.Regional cooperation 

Regional  cooperation  on  infrastructure  development  is  necessary  to  optimise  the  identification  of 
regional infrastructure priorities and to coordinate cross-border investments. The UK is a member of 
three  Regional  Groups  which  have  been  established  under  the  TEN-E  Regulation:  Northern  Seas 
Offshore  Grid,  North  South  Electricity  Interconnections  in  Western  Europe,  and  North  South  Gas 
Interconnections in Western Europe.  

11 

 
 
 
 
 
 
 
 
 
 
Towards an Energy Union – United Kingdom 

The UK is also part of the regional initiative on the promotion of the North Sea Offshore Grid, which 
aims to maximise the cost-effective development of renewable resources in the Northern Seas, and 
of the North Sea Basin Task Force which seeks to facilitate CO2 transport and storage infrastructure 
development in, around and under the North Sea.  

8. Cohesion policy contribution 

The EU Cohesion policy provides for important investment possibilities to implement energy policy 
objectives  in  the  United  Kingdom  which  will  be  complemented  by  national  public  and  private  co-
financing, aiming at optimal leverage. It also ensures integrated territorial solutions to challenges by 
supporting capacity building, technical assistance and territorial cooperation. 

Internal energy market: Over 2014-2020, EU Cohesion Policy will invest some EUR 3 million in smart 
energy  storage  and  transmission  systems,  as  well  as  around  EUR  84  million  in  smart  electricity 
distribution grids in the United Kingdom.  

Energy efficiency: Over 2014-2020, EU Cohesion Policy will invest around EUR 407 million in energy 
efficiency  improvements  in  public  and  residential  buildings  and  in  enterprises,  as  well  as  in  high-
efficiency  cogeneration  and  district  heating  in  the  United  Kingdom.  A  further  estimated  EUR  418 
million will be invested in supporting the move towards an energy-efficient, decarbonised transport 
sector. These investments are expected to contribute to around 15 000 households with improved 
energy  consumption  classification  and  a  decrease  of  around  5  547  000  million  kWh  per  year  of 
decreased  primary  energy  consumption  of  public  buildings,  as  well  as  to  around  15  km  of  new 
railway lines, 20 km of reconstructed or upgraded railway lines and 5 km of new or improved tram 
and metro lines. 

Decarbonisation: Overall, the EU Cohesion Policy investments in the United Kingdom over 2014-2020 
are  expected  to  contribute  to  an  estimated  annual  decrease  of  GHG  of  around  646  000  tonnes  of 
CO2eq. Over 2014-2020, EU Cohesion Policy will invest some EUR 421 million in renewable energy in 
the United Kingdom. These investments are expected to contribute to around 200 MW of additional 
capacity of renewable energy production. 

Research,  Innovation  and  Competitiveness:  Over  2014-2020,  EU  Cohesion  Policy  will  invest 
significantly in R&I and in SME competitiveness in the United Kingdom. This will be based on nation-
based strategies for smart specialisation. For the United Kingdom, the strategies include a focus on 
research  into  technology  and  engineering  drawing  on  strengths  in  renewable  energy  technology, 
energy efficiency, bioenergy, transport, and carbon capture and storage. At this stage, at least EUR 
270 million is foreseen for investments in R&I and adoption of low-carbon technologies in the United 
Kingdom, but this might increase further in line with the evolving content of the smart specialisation 
strategy. 

12