Energy Trends for 2012

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2011 saw rising gas prices in the UK. Between Q3 2010 and Q3 2011, domestic gas prices rose 9.2% and industrial gas prices rose 17.9% in real terms. The US became a net exporter of gas for the first time, and the UK imported more gas for the first time. With energy demands high and prices rising for a staple source of energy, this summary aims to highlight some potential energy trends in the US and UK in 2012.

Growing Consumption and the Changing Energy Mix: An overall trend which we expect to continue is the growing demand for more energy. In the UK, for example, published figures show that energy consumption in 2010 was 5% higher than in 2009 and total energy use has increased from 1970 by an overall approximate figure of 4%. The mix of fuels has changed in make-up since 1970, with a trend toward decreasing solid fuel and electricity. Renewable energy use in 2011 made up 9% of electricity generation. The change in energy mix for the UK is also driven by decisions taken at a European level, as explained below.

It is expected that official figures will show an overall increase in total energy consumption in the US in 2011 compared with 2010, as a result of increased electricity consumption but moderated by a decrease in motor fuel consumption. The US government projected that biofuels supply will increase steadily through 2035 in response to the Renewable Fuels Standard Mandate. Generation from coal was predicted to increase by 25% from 2009-2035, largely as a result of the use of the existing capacity. However, coal’s share in the total energy mix is predicted to fall from 45% to 43% as a result of more rapid increases in generation from natural gas and renewables over the same period.

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