This is an extract from a recent report “Clean Power 2030 builds stability by cutting import reliance” by EMBER. 

Relying on fuel imports risks energy stability

To shield British consumers from future gas price volatility, the UK Clean Power 2030 Action Plan aims to decrease gas imports for electricity generation. As UK fossil fuel production continues its long-term decline, reducing demand is critical to limit import dependence. Recent global volatility across oil, gas and biomass prices shows the benefits of homegrown, clean power generation. The UK is overreliant on fuel imports for energy generation, leaving it exposed to price shocks. In total, 45% of gas supply, 44% of oil products such as diesel, and around 95% of wood pellets are imported in the UK. These fuels are not only used for electricity generation but also in transport, heating, and in industry. The UK’s reliance on these imported fuels leaves it vulnerable to price fluctuations, which are set by global markets. The 2021-2022 energy crisis is still affecting consumer energy bills, as generating electricity using gas remains 88% more expensive than the pre-crisis average. Overreliance on gas, which is used for electricity system balancing and for heating around 80% of homes, has led to lasting energy bill increases. Although UK wholesale power prices have reduced since the 2022 peak, the cost of generating electricity using gas is once again increasing, having risen by a third (33%) across 2024.

The UK’s use of LNG (Liquified Natural Gas) import shipments also exposes the UK to competing trade complications. The UK receives its gas imports from two main sources: pipeline gas from Norway, and LNG from the USA, Qatar and other countries. Overall LNG imports made up a fifth of the total gas supply, and during the energy crisis LNG imports increased, to be re-gassified and exported to Europe. However, LNG is also typically more expensive than pipeline gas, with the market more competitive. Reduction in gas demand through clean power deployment may mean reduced exposure to LNG markets, though with tariffs on China-US LNG trade announced there may be increased volatility in the market which has also seen price increases across 2024. Reliance on LNG imports means that the UK is exposed to international political volatility and market constraints. The price of generating power using gas has risen consistently over the past 12 months, while continuing competition and tariffs on LNG trade threaten market stability. Although gas is currently important in balancing the UK electricity system, its cost and volatility have serious implications for energy security. Reducing demand is therefore a critical component of building energy system stability going forward.

With production of oil and gas in long-term decline in the UK, homegrown power sources are critical to reduce import reliance and build stability in the energy system. Reducing demand for import-reliant fuels such as biomass and gas builds long-term energy security. The UK’s oil and gas production is in long-term decline, with a 68% drop between 2003 and 2023. Without an equivalent reduction in fossil fuel demand, UK exposure to import price shocks is set to increase. Since the first UK offshore oil fields were discovered in 1975, new finds have been smaller and harder to extract, while older fields produce less over time. As a result, overall production is declining. Although energy demand has also fallen, it has not decreased as quickly as production, meaning that import reliance has increased. To reduce reliance on fuel imports therefore, the UK needs to cut overall demand for oil and gas. This can be achieved through improved energy efficiency, expanded renewable generation and clean electrification.

Despite coal phase-out, the UK remains reliant on imports of oil, gas, and biomass. In total, the UK imports 40% of its energy supply, exposing its economy to price shocks. Despite the decline of coal use in power generation and industry, the UK remains heavily reliant on the remaining imported energy fuels. Oil and oil products, such as petrol and diesel, are the largest imported energy fuel in the UK, followed by gas and bioenergy, which overtook coal as the UK’s third most imported fuel in 2019. Collectively, oil, gas and bioenergy comprise 86% of the total energy supply in the country. Transport fuel prices have been highly variable over the last four years, impacting homes and commercial users in the UK. Overall, 44% of petroleum products used by UK consumers are imported on average. Oil is imported in two broad forms: as raw primary oil and as refined petroleum products. Once refined, oil petroleum products are mostly used in the transport sector (80%), which is the largest consumer of UK energy and almost entirely relies on petroleum fuels for supply. The rest goes to other sectors like homes and industries, including the plastics industry. Bioenergy is the third largest UK import and is increasingly used across the economy in power generation (56%), home heating (22%), as well as transport fuels and gas grid injection (22%). However, it also has a range of cost, carbon and energy security impacts.

The UK trades electricity through long-distance interconnectors with many of its neighbours, although the volume of energy is small, these interconnectors can play an important role in balancing the power system. The UK imports 5% of its yearly electricity supply on average, over the past 10 years (2013-2023). Interconnector flows are market driven and typically reflect the cost imbalance in power prices between European neighbours. In 2022, Britain became a net electricity exporter for the first time in over 40 years, as supply was increased to France due to maintenance at multiple nuclear power plants in France, reducing generation. Interconnectors provide a flexible resource to balance variable renewable generation, aiding system stability. Although the UK currently has higher wholesale electricity costs than many of its interconnected neighbours, as UK renewable energy deployment continues the wholesale power price is expected to gradually reduce, albeit at a slower rate than they increased during the recent energy price crisis. Therefore, the role of interconnectors may change over time, from providing flexibility to the UK power grid, to also facilitating increasing levels of power exports to the rest of Europe. Therefore, although the UK does rely on electricity imports for a part of the power supply each year, these have a balancing effect on power prices – rather than exposing the UK to increased price shocks in the way that other import reliance does

Getting off imports to stabilise UK electricity bills

The UK Clean Power 2030 Action Plan aims to reduce reliance on fossil fuels. Other imports such as biomass remain in the power system by 2030, increasing UK exposure to volatile energy bills. Since 2014, gas has been the single largest source of power generation in the UK. However, progress towards a clean power system by 2030 aims to reduce the UK’s reliance on gas imports. In December 2024, the UK Department of Energy Security and Net Zero (DESNZ) published a Clean Power 2030 Action Plan to tackle overreliance on gas in the electricity system. This 2030 plan intends to reduce the proportion of gas used in power generation to below 5%, down from 28% in 2024. This will limit both the total volume of expensive gas purchased but also the number of hours that gas sets the price in the wholesale electricity market – restraining the impact of gas price volatility. Ember estimates that the Clean Power 2030 Action Plan will cut gas imports for electricity generation by 57% (-53 TWh) in line with the NESO ‘Further Flex & Renewables’ modelling. This is due to a large reduction in gas power use, displaced by a rise in renewable power generation. Overall, gas consumption for power generation is forecast by NESO to fall from 204 TWh in 2023, to 53 TWh in a 2030 clean power system. Clean power deployment therefore limits the availability of gas power plants to influence the wholesale power price, as well as reducing overall import volumes.

The accelerated deployment of low-carbon power generation in the Clean Power 2030 Action Plan will reduce total gas consumption for power by around three-quarters (-154 TWh). Achieving this demand reduction is critical to reduce exposure to market volatility, because the import reliance of gas supply is forecast to increase from around half (45%) in 2023 to over 75% of supply by 2030, due to a decline in UK gas production. Cutting reliance on gas for power through the Clean Power 2030 Action Plan reduces the exposure of UK bill payers to high gas prices and market volatility. The largest component of residential electricity bills is the wholesale price of power which is typically driven by gas power prices, other components include network costs, VAT, and policy obligations. In the UK wholesale power markets, the cheapest generators are used first, but the overall price is set by the most expensive units needed to meet demand, which in recent years has meant that expensive gas power plants often set the price of power.

Looking forward, reducing gas use by building clean power generation alternatives cuts power price volatility. Recent modelling by Baringa highlighted that household electricity bills would increase by five times less in a clean power system if faced with a comparable energy crisis, compared with 2022. Reducing gas use through a transition to a clean power system is the fastest way to reduce the impact of international gas prices on UK energy bills. The long-term decline in gas production means that a new gas power plant or gas CCS power plant will be more than twice as reliant on imports over its lifetime compared to historic gas power stations. For instance, a UK gas power plant built in 2025 will rely on 80% imported fuel over its lifetime, while a plant built in 2000 was 30% reliant on imports. Renewable energy has reduced the impact of fossil fuel import reliance to date Since coal use in the UK power sector peaked in 2012, renewable power has increasingly displaced coal power without increasing the overall share of gas power. In 2024, the gas share of total power generation fell to its lowest since 2015.

The wind down in biomass power has begun

As the prices of gas jumped during the recent energy crisis, other imported fuels also saw cost shocks. Due to the reliance of large-scale biomass power on imported wood pellets, generators are exposed to knock-on price volatility during an energy crisis. The average wood pellet import price level, measured by value per volume imported, jumped 34% in 2022/23 compared to the pre-crisis average, and remains 27% above average in 2024. The Clean Power 2030 Action Plan does not explicitly target reduced biomass consumption, though more recent announcements signal the beginning of a wind down. The government action plan includes a capacity range for ‘low-carbon dispatchable power’ of both higher and lower than current biomass capacity, meaning there is no commitment to reduce imports, despite the high cost of biomass power generation and its high import reliance. Recent Ember modelling however, suggests that high capacity levels are not required in a 2030 clean power system. Modelling showed that generating capacity at Drax power station, the largest biomass power plant in the country, could be reduced to a quarter of its current size within a stable functioning 2030 clean power system. This is a large reduction from current levels. In 2024, wood pellet import expenditure and volumes likely reached record highs, over 9.6 million tonnes, with generation at Drax power plant increasing 28% on 2023 levels.

In February 2025 a government decision was announced for the future of subsidies for Drax power station beyond the current end of subsidies in 2027. The announced subsidy package introduces some additional limits and conditions on subsidy payments to large-scale biomass power generation, including capacity factor limits and a contract limited to four years. These conditions will cap the estimated annual subsidy to half of its current level, and cut total biomass generation across the year. Minimising biomass generation represents an opportunity for a clean power system in 2030 to go further in cutting import reliance, beyond gas reduction. Accelerated support for clean power generation and energy system flexibility will reduce the role of biomass to the margins of the power system, reducing import reliance and expenditure.

Conclusion

UK gas and oil production is in long-term decline. The only way to reduce import reliance is to accelerate clean power deployment and supply consumer demand with a more resilient, independent grid. The Clean Power 2030 Action Plan is estimated to reduce imports in the power system by around half due to the accelerated deployment of renewable energy displacing gas power, despite declining UK oil and gas production. However, the wider energy system remains reliant on imports of gas and oil for heating, transport and commercial uses. Furthermore, the Clean Power 2030 Action Plan does not target deep reductions in biomass consumption, which is currently overwhelmingly reliant on imports. Gas imports for power generation in 2030 are estimated to be 57% lower than in 2023. However, domestic heating using gas is increasingly reliant on imports, by 2030 a heat pump will rely on 85% less energy imports compared to a gas boiler. Transport fuels make up the largest component of domestic energy expenditure, and are another connection between household expenditure and international markets. 

Petrol and diesel pump prices are 13% above pre-pandemic levels (2024 and 2019 average), as pump prices have risen alongside gas prices during the energy crisis. Electrifying heating and transport reduces import dependence and importantly, strengthens energy stability across multiple energy sources by making the best of a more efficient and independent UK power system. Although there is a power system action plan, the UK does not yet have a joined-up strategy to bring together the energy security benefits of clean power with the cost benefits of electrified household energy consumption. Households use more gas than the power sector, and spend more on vehicle fuels than on electricity and gas combined. A new strategy is needed to fortify the wider energy system against price shocks and import dependence. Electrification is a critical part of the solution to significantly reduce import reliance for household energy, along with wider measures to improve energy efficiency and reduce consumer bills.

Access the report here