Gas Consumption by Sector

It is always easy to think of the energy industry from the domestic customer point of view.  

We are all, at the end of the day, domestic customers for energy supply in some shape or form. All of us have to pay the bills for our own energy use at our places of residence.

But…

It’s not entirely fair to try and observe business energy use through the same domestic lens.

The two types of energy customers are simply too different to be compared so easily – with vastly different budgets, contract types, energy uses, goals and objectives, rules and regulations, the list goes on…

So why do we continue to do it?

Because for most of us learning about energy is really boring – especially when it doesn’t really apply to our current situation. It’s a heck of a lot easier to just try and hold others to the same standards we hold ourselves to than try and further our understanding through reading a ten-minute article on a subject we aren’t really interested in…

But you’re here now and you’ve got this far, so you may as well be the exception to the rule and keep reading this boring article, right?

In this article, we aim to introduce some of the overarching consumption trends and differences between different UK fuel types, with a particular focus on gas in this article.

Industry Expenditure

In the UK, we are lucky enough to have a developed enough economy to maintain a variety of industries.

In terms of contributions to UK GDP, this is dominated by the Services sector – making up a whopping 71.26% of UK GDP in 2019. This is followed by Industry contributing 17.41%, and then Agriculture with 0.61%.

Contributions to UK GDP in 2019:

• Services 71.26%
• Industry 17.41%
• Agriculture 0.61%

Source: statista.com

Of course, this doesn’t tell us anything about energy consumption just yet.

But it does set the scene a little for further exploration.

Knowing the proportion of GDP that each sector contributes will help provide a little context and scale to the rest of the figures included in this article. By this, it is not meant to diminish the importance of any conclusions… rather, provide the background information to help readers extrapolate their own findings. 

During 2018, most industry groups purchased the highest proportion of their total intermediate consumption from services products. The only exceptions to this rule came from businesses within the production and agriculture industry groups, who purchased more goods products than services or energy. Those in the finance and insurance group purchased the most services products over the course of the year, making up 96.0% of their total intermediate consumption. By contrast, businesses within the production group purchased the least – 20.0%.

What is most interesting (and relevant) is that businesses within the production industry group purchased the most energy products. This includes water and waste services and accounts for 19.2% of their total intermediate consumption. This is closely followed by the agriculture industry group with 17.8%. In third – the distribution, transport, hotels and restaurants industry group with 16.3% of their total intermediate consumption used on energy. Those in the finance and insurance group purchased the least energy products – only making up 1.3% of their total intermediate consumption.

So, heading into the main bulk of the article we now have three things:

• A rough understanding of what the most important industries are for the UK economy
• An understanding of how different business groups have entirely different demands as part of their unique production processes
• A burning desire to keep reading this wonderful piece of writing

Not all energy is created equal

Generation Source	Kg CO2 per KWh
Open Cycle Gas Turbine	0.5
Closed Cycle Gas Turbine	0.5
Oil	0.65
Coal	0.9
Nuclear	0.005
Pumped Storage	0.02
Non-Pumped Storage Hydro	0.005
Wind Onshore	0.00464
Wind Offshore	0.00525
Solar	0.058

It would, again, be easy to make sweeping statements at this point.

In reality, we have barely skimmed the surface and any conclusions made at this point would probably be made prematurely.

Just because a certain industry group spends more of their resources on energy costs as part of their intermediate consumption, does not mean they will also be causing the most damage in terms of emissions released.

It is important to understand that there are differing amounts of emissions released from the generation of the same unit of energy based solely on the source and method of generation.

When ‘The transition away from fossil fuels’ is talked about in general conversation there is always an appreciation that they are worse for our planet, but not often any understanding past this point. You would be hard pushed to find anyone in the UK who doesn’t know that energy generated from solar is better for the planet than coal-generated energy.

On the other hand, if someone were to bring up that coal releases over fifteen times as much carbon dioxide per as solar energy per kWh of electricity generated, this would paint the picture a little clearer for all.

From the table above, it is clear to see quite how much of a difference there is between carbon dioxide emissions from traditional fossil fuel sources and renewable energy sources.

The UK fuel mix

Although there are more sources of exploitable energy sources than you can shake a stick at, the UK utilises three primary fuel sources.

These are as follows:

• Solid Fuels, Petroleum, and Bioenergy – 51%
• Natural Gas – 31%
• Electricity – 18%

Although it may look at first glance like the UK fuel mix is dominated by Solid Fuels, Petroleum, and Bioenergy – one interesting statistic reveals that this may not be the case.

The total amount of energy consumed in the UK fell from 142,724 mtoe in 2018 to 142,000 mtoe in 2019. This represents a drastic fall in energy consumption across the country.

During this plummet in energy consumption from 2018 to 2019 – you would think that the consumption of the three primary fuel sources would also drop, right? 

After all, it is common sense…

If you nodded silently along in agreement, you are only two thirds right.

Electricity and Solid Fuels, Petroleum, and Bioenergy use from 2018 to 2019 fell quite dramatically – by 1.7% and 0.75% respectively.

During this time, Natural Gas usage grew by 0.9% against the UK backdrop of falling consumption.

Not what you would expect, right?

Now let’s see what this looks like broken down even further.

Changing Gas demand, by Sector

With this added layer of detail, it is a little clearer as to why Natural Gas was the only portion of the UK fuel mix to experience growth over this period.

Across the board consumption is dropping, usage plummeting for Public Administration, Industry, Transformation, and Domestic reasons. This is not unusual when compared to similar drops in consumption of Electricity and Solid Fuels, Petroleum, and Bioenergy. It is also important to note that the overall trend of UK gas consumption has been pointed downwards since 2000 – consumption down by 22% overall (2000 – 2019) and a 45% drop in industry demand (2000 – 2019).

But what is unusual, and maybe indicative of a shift in how the UK utilises gas, is the 6.1% jump in usage of gas in the Energy Industry. An increase of this scale, while almost all other areas seem to be dropping, is certainly worth further exploration.

Energy Solutions – Business Energy Specialists

At Energy Solutions, all of our energy is spent procuring yours.

With over twenty years worth of experience in energy procurement, our energy experts are well placed to help your business implement tried and tested energy management procedures.

But what does this mean?

Firstly, it means you save more of your hard-earned cash. Secondly, it means you use less energy. Thirdly, energy processes are streamlined. Fourthly, it…. Well, you get the picture.

So, if you are looking for an energy expert to help your business, give us a call today on 07757 400 788 or email us at nick@energybrokers.co.uk.

We can also be reached via webform and even over WhatsApp – 07757 400 788.

We look forward to hearing from you!

Google Snippets

What business sector spends the most on energy?

The business group that spends the most of their intermediate consumption on energy are those in the ‘production’ and ‘agriculture’ groups.

What sector contributes the most to UK GDP?

In 2019, the Services sector contributed 71.26% of UK total GDP.