Britain’s reliance on foreign energy hits record high amid fossil fuels crackdown

Data reveal struggle of oil and gas producers to generate sufficient power from renewable sources

The UK’s reliance on foreign energy supplies has hit a record high as oil and gas production on British shores is hammered by a crackdown on fossil fuels.
Britain imported almost 41pc of its energy in 2023, according to official data, as producers struggle to generate sufficient power from renewable sources and multiple ageing nuclear power stations face shutdowns. It compares the amount with a year earlier when 37pc of the UK’s energy was imported.
At the same time, total energy production, including oil, gas and electricity, fell by 8.3pc to a record low.
Earlier this week, Ed Miliband, the Energy Secretary, extended the so-called energy profits levy for two further years until the end of March 2030, while increasing the headline rate from 75pc to 78pc.
The data, published by the Department of Energy Security and Net Zero on Wednesday, show how the UK has become increasingly exposed to the global oil price and supply shocks caused by Russia’s invasion of Ukraine, as well as tensions in the Middle East.
Offshore production dropped to a record low of 34m tonnes in 2023, down 11pc on 2022, with the UK now particularly reliant on Norway for gas, and on the US and Norway for oil.
The drop coincides with a fresh surge in oil prices after Israel’s assassination of a Hamas leader in Iran ratcheted up tensions in the Middle East. A full-scale war in the region would likely push prices far higher.
Oil prices rose 1.5pc to nearly $80 a barrel on Wednesday. Brent crude, the international benchmark, had fallen 4.5pc over the previous three days but has bounced back amid concerns of an impact on exports from Iran and attacks on ships travelling through the Red Sea.
The FTSE 100 jumped as much as 1.3pc as heavyweight oil stocks Shell and BP were both up more than 2.4pc on the back of higher prices.
Ashley Kelty, a leading analyst at investment bank Panmure Liberum, said: “The reliance on overseas energy reduces UK energy security and totally exposes it to volatility in commodity markets.
“This harms the UK in terms of adverse national trade balances and increases reliance on states that have questionable human rights records. It also reduces the ability to cope in the event of sudden shocks to the global economy such as Covid or the Ukraine war.”
Mr Miliband has made achieving energy independence one of his key pledges, as well as cutting household energy bills by £300 and generating more power from renewable sources.
The UK gets about 77pc of its total energy from oil and gas, a level that has remained roughly constant for over a decade despite political pledges to reduce it.
Over the last few months Britain has been forced to import up to 18pc of its electricity, mostly from France.
The data show net imports totalled a record 23.8 terawatt hours in 2023, meaning the UK had to import about 8pc of its total electricity.
This is likely to increase further in 2024, as low wind speeds in recent months have cut wind farm output and pushed imports much higher.
This week Shell and ExxonMobil announced they were reducing their exposure to the UK by selling all their gas fields and other assets in the southern North Sea.
Offshore Energies UK, the trade body covering the oil, gas and offshore wind industries, said the new taxes announced this week would drive out investment even faster.
A spokesman said: “At the moment domestic production is falling faster than demand, which acts to increase reliance on global imports. The best way to ensure the UK’s stability of energy supplies is to invest in the UK’s diversity of energy resources – spanning oil, gas and renewables.”
Brendan Long, energy analyst at Zeus Capital, said: “The UK’s energy strategy is unlikely to mitigate the UK’s growing dependence on imported fossil fuels. That is because, in contrast to widely held perceptions, not all forms of energy have comparable practical utility.  
“The UK is also at risk of going out alone in terms of its energy strategy. The new energy policy of the Trump-led Republican Party of the US is to ensure the US has the lowest cost energy anywhere in the world, recognising that competitive energy prices are fundamental to broader economic competitiveness.”