Supply Management Strategies (AQA A-Level Geography): Revision Notes

Supply Management Strategies

Introduction to supply management

To ensure energy security, countries need to develop strategies that make future energy supplies more reliable and dependable. At the same time, these strategies must work alongside efforts to reduce consumption by improving energy efficiency.

A key decision in energy security planning involves diversifying the energy mix. Countries like the UK aim to avoid becoming too dependent on a single energy source, which would leave them vulnerable to economic disruption and supply shortages.

Oil and gas exploration

Finding new reserves

When fossil fuel prices increase, countries invest more effort in exploring for new oil and gas reserves. This includes reassessing speculative reserves to determine whether they have become economically viable to develop. Governments become more willing to grant exploration rights during these periods.

UK oil and gas exploration

Although North Sea oil and gas production has passed its peak, exploration continues and new discoveries are still being made.

In 2019, gas production started from the large Culadan field located 230 km off the Aberdeenshire coast. This project required significant investment:

• A special three-platform rig costing over \£3 billion to access the gas
• The field is operated by Total
• It supplies five per cent of the UK's demand for gas

Hydraulic fracturing (fracking)

Rising oil and gas prices encourage transnational corporations (TNCs) to develop new technologies for accessing previously unviable reserves. Hydraulic fracturing is one such technology that has been successful in the USA.

In England, fracking operations by companies such as Cuadrilla have faced opposition. The UK government stopped these operations in November 2019 following environmental protests. Key concerns included:

• An earth tremor measuring 2.9 in magnitude was recorded near Cuadrilla's Lancashire site in August 2019
• The government cited fears of damage from earthquake tremors as the reason for placing a moratorium on operations
• However, they stopped short of an outright ban

Nuclear power

Nuclear power is a long-term, efficient energy source that provides a viable alternative for energy security in many countries that have become over-reliant on fossil fuels.

Current nuclear capacity in the UK

Nuclear power currently generates around 20 per cent of the UK's electricity. However, all operating energy plants will be closed by 2030, except Sizewell B in Suffolk. This is significant because no new reactors have been opened since the Pressurised Water Reactor (PWR) at Sizewell B was commissioned in 1995.

Plans for new nuclear capacity

The UK's Department of Business, Energy and Industrial Strategy (BEIS) plans to increase new nuclear capacity as an important part of growing energy supply. The UK government relies on the private sector to build new reactors, although funding remains a challenge.

Challenges facing new projects

Several proposed nuclear projects have faced difficulties:

• Projects at Oldbury (Gloucestershire) and Wylfa (Anglesey) have been shelved as developers Hitachi-GE failed to attract investors
• Plans for new reactors at Sizewell C and Bradwell B (Essex) in the mid-2030s using Chinese technology mean that nuclear power will remain part of the UK energy supply strategy for the rest of the century

Benefits of nuclear power

There are important reasons why nuclear power remains an essential part of a country's energy supply strategy:

• Low carbon emissions: It is a low carbon choice that supports climate change goals by generating electricity without emitting greenhouse gases
• Reliable baseload power: It produces electricity 24 hours a day, regardless of the weather
• Fuel efficiency: Reactors do not require a daily supply of new fuel to operate

Development of renewable resources

Since the Paris Climate Agreement was signed in 2016, developing renewable energy has become a key strategy to increase energy supply in many countries. However, high installation costs often require government intervention through subsidies.

More recently, the drive for energy transition and decarbonisation has increased market demand and investment from the private sector.

Government support for renewables

In the UK, various government subsidies were offered to provide financial support for renewable electricity suppliers. These were stopped in 2015 because falling installation costs meant they were no longer necessary.

The government's Review of Energy Policy in 2019 placed climate change higher on the agenda than ever before. The UK committed to net zero greenhouse gas emissions by 2050.

Growth of renewable energy in the UK

Incentives have driven rapid growth of renewable energy in the UK, particularly from wind, solar and biomass sources. The UK has become the world leader in offshore wind energy, which generates around 10 per cent of the nation's energy supply.

By 2019, renewable energy competed with gas to become the largest source of power in the UK. Both contributed around 39 per cent of the electricity mix. With nuclear energy still providing nearly 20 per cent, renewables have largely replaced coal in the country's electricity mix.

Notable UK renewable energy projects

Demand management strategies – managing energy consumption

The focus is set to reduce overall energy consumption through international agreements such as the Paris Agreement. Energy conservation efforts are mostly driven by:

Government incentives

Governments provide financial support for energy-saving measures. For example, they may subsidise householders' loft and cavity wall insulation to reduce heat loss from homes.

Media campaigns and awareness

Campaigns to raise awareness about energy saving may be government-led or run by energy-saving NGOs such as the Carbon Trust. These help educate the public about ways to reduce consumption.

Pricing strategies

The cost of fuel provides a natural incentive for energy saving. However, off-peak electricity pricing can also reduce pressure on electricity generation by encouraging people to use energy at different times of the day.

Household energy saving

The EU Directive on the Energy Performance of Buildings is part of government strategy for tackling climate change. The directive requires an Energy Performance Certificate (EPC) to be issued whenever a property is constructed, rented out or sold.