UK drops out of top 10 in energy trilemma ranking

The UK has dropped out of the top 10 of the World Energy Council’s energy trilemma index, despite being awarded the highest grade possible.

The Brexit vote, cuts to renewables subsidies and changes to the rules governing the foreign ownership of infrastructure were all blamed for the fall.

Britain placed eleventh in the overall ranking, down from tenth in 2015 and ninth the year before that. The index orders countries according to their performance across the three pillars of the energy trilemma, which it refers to as ‘energy security’, ‘energy equity’ and ‘environmental sustainability’.

The UK improved its grade in the energy security category from B to A and moved up six places in the ranking to 32nd. The country retained an A grade for environmental sustainability and rose one spot in the ranking to 15th. Despite also holding on to an A grade for energy equity, it dropped a place in the ranking, falling from seventh to eighth.

Britain’s absence from the top 10 was partly due to improvements by other countries. Seven of the top 10 received the triple-A grade this year compared to just four in 2015.  

However, the UK faces “significant challenges” in securing energy supplies according to the index. Plans to phase out all unabated coal-fired generation by 2025 have been “put into question” by the vote to the leave the European Union, as an exit from the single market could “significantly increase the cost of its energy imports”.

Changes to the rules over foreign ownership of infrastructure, announced as the government gave the final go-ahead to Hinkley Point C, have resulted in “investment uncertainty,” and sharp cuts to the feed-in tariffs for wind and solar “may hinder investments in these sectors”.

The creation of the Department for Business, Energy and Industrial Strategy may provide “more clarity for future energy investments”. Nevertheless, the UK has been placed on the watch list for potential downgrades next year.

The top 10 was dominated by European countries, with only ninth-placed New Zealand denying the continent a complete sweep. Denmark came in first, Switzerland in second and Sweden in third.

Source: World Energy Council/Oliver Wyman