10 Biggest Energy Companies in the UK
In this article, we will take a look at 10 of the biggest energy companies in the UK. If you want to see more of the biggest energy companies in the UK, go directly to 5 Biggest Energy Companies in the UK.
The United Kingdom or UK has one of the largest economies in the world with a 2021 GDP of $3.19 trillion. In the same year, only the United States, China, Japan, and Germany had higher nominal GDP. By GDP, PPP, the United Kingdom's economy also ranks #10 in the world.
As one of the biggest economies, the UK uses a lot of energy.
With a population of around 67.33 million, total energy consumption in the UK was 134 million tonnes of oil equivalent for 2021, up 4.6% from pandemic-affected 2020 according to the Department for Business, Energy & Industrial Strategy for the UK.
In terms of 2022, UK's total energy demand is likely around what it was in 2021 as total final energy consumption was only 0.2% lower in the second quarter of 2022 than what it was in the second quarter of 2021.
With more focus on building energy efficient homes, energy consumption might not rise very much for the near future.
The Energy Industry in the UK
The energy industry was bigger in the UK in the 1980's when oil and gas extraction was higher given North Sea production. In 1982, the energy industry accounted for as much as 10.4% of the total UK economy and the UK was a net exporter of oil at that time.
Now, the UK is now a net importer of oil. According to the Office of National Statistics for the UK, "The UK imported ￡30.0 billion of oil in 2021 (￡17.6 billion crude oil, ￡12.4 billion refined oil), and exported ￡28.3 billion of oil (￡17.9 billion crude oil, ￡10.4 billion refined oil)."
For gas, the UK is less reliant on its internal production than oil. The Office of National Statistics for the UK writes, "The UK imported ￡19.6 billion of gas in 2021; a notable increase of 312% from ￡4.8 billion in 2020. The UK exported ￡3.4 billion of gas in 2021, increasing by 167% from ￡1.3 billion in 2020."
As a result of less oil and gas production as well as the growth of the non-energy part of the UK economy, the energy sector accounted for 2.5% of the gross value added for the UK in 2021. The industry is still big, however, as it directly employed 175,000 people and more indirectly.
According to the EIA, the United Kingdom was still the second largest producer of petroleum and other liquids and natural gas in OECD Europe in 2021, trailing only Norway. In 2021, the country produced 934,000 barrels per day in total liquid fuels and 1.1 trillion cubic feet of natural gas, with most of the production from offshore fields.
In terms of its electricity generation, the United Kingdom has made progress in terms of sustainability as 46% of the country's electricity generation came from renewables in 2020, versus 36% for natural gas, and 16% for nuclear.
In the future, it is likely that renewables will account for an even larger percentage of the UK's total electricity generation. Given the need for a more sustainable future, the UK has a goal to bring all greenhouse gas emissions to net zero by 2050. Net zero according to the UK's Parliament is,
In simple terms, ‘net zero’ means our total emissions are equal to or less than the emissions we remove from the environment. This can be achieved by a combination of emission reduction and removal by offsetting. Achieving actual zero greenhouse gas emissions is not seen as a realistic option. Instead, net zero emissions would mean that any emissions that could not be eliminated by 2050 would be compensated for by measures that remove emissions from the atmosphere (sequestration).
As a result, many of the leading UK energy companies have focused more on renewables in their portfolio in recent years and the companies are planning on investing billions in the future to help increase renewable energy generation.
Pixabay/Public Domain
Methodology
For our list of 10 Biggest Energy Companies in the UK, we took the two largest oil and gas companies based in the UK, Royal Dutch Shell plc (NYSE:RDS) and BP plc (NYSE:BP) and added them to the big 5 energy companies in the UK, which includes Centrica given its subsidiary is British Gas, EDF given it owns EDF Energy, E.ON which owns E.ON Energy UK, and Iberdrola which owns Scottish Power. We also included FTSE 100 index utility component National Grid plc (NYSE:NGG), and FTSE 250 utility components such as ContourGlobal plc and Drax Group PLC.
We then ranked them based on 2021 revenues from macrotrends.net.
Given many of the 10 biggest energy companies in the UK are multinational corporations, their UK operations only account for a percentage of their total sales.
10 Biggest Energy Companies in the UK
10. ContourGlobal plc
2021 Revenue: $2.152 billion
ContourGlobal plc is a British FTSE 250 company that is a growth platform for acquiring and developing wholesale power generation with long term contracts diversified across different fuel types and geographies. In terms of its portfolio, ContourGlobal plc has 6,311 megawatts in operation, 138 power plants, and operations in 20 countries. The company's renewable energy segment generates 1,808 MW of electricity from hydro, solar, wind, and biogas. In 2021, ContourGlobal plc reported revenues of $2.152 billion, ranking the company #10 on our list of 10 Biggest Energy Companies in the UK.
9. Drax Group PLC
2021 Revenue: ￡5.174 billion ($6.039 billion)
Drax Group PLC is a UK based renewable energy company that's also part of the FTSE 250 with around 3,400 employees in the UK and North America. For its UK business, Drax Group PLC has a goal "to be carbon negative by 2030, using Bioenergy with Carbon Capture and Storage (BECCS) technology to remove carbon dioxide (CO2) from the atmosphere at scale whilst delivering reliable renewable electricity." Given the UK's plan to achieve net zero by 2050, Drax Group PLC's renewable goals will help the country achieve more sustainable energy. In 2021, Drax Group PLC reported revenues of ￡5.174 billion, which would be slightly over $6 billion under current exchange rates.
8. SSE
2021 Revenue: $8.931 billion
SSE is one of the UK's largest electricity network companies and a leading generator of renewable electricity. With 10,000 employees, the company develops, owns, and operates low carbon infrastructure that will help the UK's zero-carbon transition. SSE also has operations in Ireland, Japan, Spain, Portgual, Denmark, and Poland. For 2021, SSE ranked #8 on our list of 10 Biggest Energy Companies in the UK with revenue of $8.931 billion.
7. National Grid plc (NYSE:NGG)
2021 Revenue: $19.335 billion
National Grid plc (NYSE:NGG) is a UK company that owns the high voltage electricity transmission network in England and Wales. The company also owns and operates electricity distribution networks in New York and Massachusetts and gas distribution networks across the Northeastern US. In 2021, National Grid plc (NYSE:NGG) had revenue of $19.335 billion, ranking it among the largest energy companies in the UK.
6. Centrica (British Gas)
2021 Revenue: $20.274 billion
Centrica is a UK based company that owns British Gas, which is the UK's leading energy supply and in home servicing provider. According to the company, British Gas has 7.26 million energy residential customers, 3.4 million services customers, and 7,000 engineers. As for Centrica, the company had 2021 revenue of $20.274 billion, which ranks it #6 on our list of 10 Biggest Energy Companies in the UK. In terms of its goals, Centrica wants to be a net zero business by 2045, with 40% carbon reduction by the end of 2034. The company also hopes to help its customers be net zero by 2050, with 28% carbon intensity reduction by the end of the decade.
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Disclosure: None. 10 Biggest Energy Companies in the UK is originally published on Insider Monkey.