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Baseline Report Annex B: Energy

Analysis of the UK's energy generating infrastructure which informs the Second National Infrastructure Assessment: Baseline Report.

Tagged: Energy & Net ZeroNational Infrastructure Assessment


Energy is an essential utility. Electricity powers people’s lights, fridges, internet, computers, and other staples of modern life. Other infrastructure sectors are also highly dependent on electricity – the transport, digital and water sectors all depend on electricity to various degrees.

Most homes are heated with natural gas, which also provides energy for cooking and hot water. Disruptions to the energy supply can therefore be high impact, with the potential for multiple cascading failures. Fortunately, the UK’s energy sector is one of the most reliable in the world, with comparatively few interruptions in supply that affect consumers.1

Energy infrastructure consists of two key networks: electricity and natural gas. Energy inputs for transport, including the electricity and charging points needed for the switch to electric vehicles, are covered under Annex F: Transport.

Electricity networks supply the vast majority of homes and businesses. The natural gas network is connected to around 85 per cent of homes.2 Other sources of energy, such as oil and biomass, are used in much smaller quantities within homes and businesses and do not use extensive infrastructure systems.

The electricity system consists of infrastructure that generates electricity, which includes wind turbines, solar panels, nuclear power stations and gas-fired power stations, batteries and other infrastructure that can store electricity, and transmission and distribution networks to transport electricity.

The gas system consists of entrance and processing points for gas, and like electricity, there is a transmission and distribution network that transports gas to homes, businesses, industrial users, and power plants. The UK’s gas supply comes from a mix of natural gas piped directly from the point of extraction or shipped over long distances as liquefied natural gas. In 2019, over half of the UK’s gas supply was produced domestically, with Norway being the highest source for imports.3

In homes and businesses, energy infrastructure includes meters, heating systems and energy efficiency improvements, like loft insulation and double glazing, that reduce demand for energy.

In 2019, electricity consumption was around 300TWh, and gas consumption was around 500TWh. In addition there was 270TWh of gas used to generate electricity.4 Domestic consumption constitutes a significant part of overall consumption, with 35 per cent of electricity and 61 per cent of gas.5 The current average annual consumption for typical households is 12,000 kWh a year for gas, and 2,900 kWh a year for electricity.6

Infrastructure used in the generation and supply of energy is capital intensive. The system has been growing year on year and in 2019 the net capital stock of energy assets in the UK totalled £117 billion in real terms (2019-20 prices).7 This expansion is largely due to overall growth in the economy as there are similar trends in other sectors, but there has also been a significant proportion of investment in recent years into new electricity generation.

Energy and the Commission’s remit

The Commission’s remit covers the energy system as a whole, including energy efficiency. The Commission does not look at upstream energy extraction and processing.

Where energy policy is devolved it falls outside of the Commission’s remit. This means that, except for nuclear policy, the Commission’s remit does not cover Northern Ireland and it does not cover energy efficiency policy in Scotland and Wales.

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Second National Infrastructure Assessment: Baseline Report

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