HomeUK’s Energy Mix Still Showing Strong Dependency on Oil

UK’s Energy Mix Still Showing Strong Dependency on Oil

The world shifts to green policies. Like it or not, the days of fossil fuels are counted, as seen in the declining share price of most oil producers. 

However, do not think for a moment that the oil industry will cease to exist overnight. In fact, the likelihood is that oil and oil-related products (by-products) will always be around. Just that humankind strives to distance itself from the use of oil in the energy mix, due to the environmental concerns.

Offshore Wind Power for Every Home in the UK

One of the major supertrends lying ahead of us is the rise of renewables. Almost every developed country or region in the world has a plan to increase the share of renewables in the energy mix, while decreasing the one of oil.

What does it have to do with investing, one may ask? Everything.

To change the energy mix structure, one needs investments. Investments come not only from government related policies (i.e. public sector), but also from the private sector. Green bonds and green projects, as well as the rise of ESG (Environmental, Social and Governance) in corporation’s culture, lead to the birth of funds dedicated to improving the energy mix.

In the United Kingdom, the plan is to power every home in the kingdom with energy from offshore wind, by 2030. At the time of the plan, 2030 seemed far away. In fact, there is just one decade away and the dependency of the UK’s energy mix on oil remains. In 2019, only 14.4% of the total primary energy consumption belonged to renewable energy.

In other words, there is more to be done. However, the change is here, and the direction is clear.

This month, Prime Minister Boris Johnson presented a “green industrial revolution” plan. Among other things, it brings a ban on selling diesel cars, for example. The plan aligns with what other countries and regions in the world do. Only a look at the European Union shows that the United Kingdom follows the EU lead on green projects. More utility-scale solar PV and wind projects are coming online in 2021 in France and Germany, while the European Commission supports investment in the area by providing both grants and loans at very cheap rates. Even Latin America, North Africa and the Middle East have renewable energy additions planned for 2021.

All in all, the world saw how nature “healed” during the March and April lockdowns. For a short period, humankind saw the clear benefits of renewable energy. Expect it to be the major theme in the decades ahead.

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