Risk/opportunity:(from the Climate Change Risk Assessment for Scotland 2012):
BE9 Reduction in energy demand for heating

Narratives: Resilience and resource use

SCCAP theme: Buildings and infrastructure

SCCAP objectives:
B1: Understand the effects of climate change and their impacts on building and infrastructure networks
B2: Provide the knowledge, skills and tools to manage climate change impacts on buildings and infrastructure

Latest figures

2013:

Total non-domestic gas usage in Scotland: 20,545 GWh

There has been a decrease in non-domestic gas consumption between 2005 (25,614 GWh) and 2013 (20,545 GWh), but with fluctuations across years, with the lowest usage in 2009. Consumption decreased each year between 2010 and 2013.

Trend
At a glance
  • Non-domestic gas consumption gives an indication of energy demand for heating
  • Climate change will raise average temperatures, and so should reduce energy used for heating
  • An increase in thermal efficiency and energy efficiency should also reduce energy for heating, though other drivers, such as chosen internal temperature, may increase it
  • Total non-domestic gas sales decreased by almost 20% between 2005 and 2013.  This decrease appears to be largely driven by a fall in the number non-domestic customers
  • Per customer consumption was higher in 2013 than in 2005
  • Gas consumption may decrease in future due to improved energy efficiency and a move towards renewable energy and heat sources

An increase in average winter temperatures provides an opportunity for Scotland to reduce its gas consumption.  This will help contribute to one of the four transformational outcomes (a largely decarbonised heat sector by 2050 with significant progress by 2030) necessary to meet Scotland’s target of an 80% greenhouse gas emission reduction by 2050 (Scottish Government, 2013). Of the 55% of total energy consumption accounted for by heat demand, approximately 60% is consumed in the industrial and commercial sectors. Scotland needs to reduce energy demand and decarbonise the supply ensure a secure and low carbon energy supply for the long-term (Scottish Government, 2013).

The aim of UK energy policy is to ensure consumers have access to energy services (physical security) while avoiding excessive price volatility (price security) (DECC (2012)). Energy policy is largely a reserved matter (i.e. policy from Westminster), but energy security is a priority for the Scottish Government, which has powers relating to planning, energy infrastructure and generation, and responsibility for resilience, response handling, and civil contingencies. Reducing dependence on fossil fuels will reduce Scotland’s greenhouse gas emissions, and will make the energy supply less vulnerable to the volatility of wholesale gas prices (Scottish Government (2013)).

Related indicators: 

BB26 Natural gas usage; domestic

Table 1 contains details of total Scottish non-domestic gas sales between 2005 and 2013. Overall, figures have fallen since 2005, but with some fluctuations and with lowest total sales in 2009. The reduction is mainly due a decrease in the number of non-domestic gas customers.  Consumption rose per customer between 2005 and 2010 but in the four years since then there has been a decrease in average consumption per customer.

Table 1: Total non-domestic gas sales (GWh) and average consumption per customer (kWh)  

Year

Total non-domestic gas sales (GWh)

Number of non-domestic gas customers (thousands)

Average gas consumption per customer  (kWh)

2005

25,614

34.3

745,902

2006

24,468

32.5

752,127

2007

25,121

31.2

804,581

2008

24,083

29.4

818,875

2009

20,378

25.8

788,367

2010

22,860

25.4

900,672

2011

22,179

24.7

898,734

2012

21,729

25.0

883,124

2013

20,545

24.0

849,129

It is expected that non-domestic gas consumption in Scotland will decrease in the future. This is driven by changes such as the improved energy efficiency of buildings and technology, an increase in the proportion of energy and heat generated from renewable sources and a reduction in the number of non-domestic gas customers.

Scottish Government is working towards a largely decarbonised heat sector, with a mid-term target of making significant progress towards this goal by 2030. This will be achieved through a combination of reduced demand and improved energy efficiency, together with an increase in the use of renewable or low carbon heating. Currently 3% of energy for heating is derived from renewable sources and the target for 2020 is to increase this to 11%, and to reduce final energy consumption by 12% relative to the 2005-2007 baseline figures (Scottish Government, 2015).

The UK Government’s Non-Domestic Renewable Heat Incentive (RHI) started in late 2011 with the aim of increasing the proportion of heat generated from renewable sources.  It is open to industrial, commercial, public and not-for-profit sectors. Since its launch, 1GW of installed capacity has been accredited under the Non-Domestic RHI.  This is significant as 1GW of installed capacity is the same peak energy output as 2 typical gas-fired power stations (Ofgem, 2014).

Of this, the accredited installed capacity for Scotland is 19% (Ofgem, 2014). The Scottish Government has set a target of providing 20% of energy through renewable sources, including 11% of the energy used for heating, by 2020 (The Scottish Government, 2009).  Clearly, an increase in installed renewable heating capacity should reduce heating demand from traditional sources in the non-domestic sector (The Scottish Government, 2009).

As shown in Table 1, there has been a decrease in the number of non-domestic gas consumers since 2005. The decrease has slowed in the last few years, so it is unclear if it will continue in the future.

The data show an overall decrease in non-domestic gas consumption as measured by total non-domestic gas sales since 2005. Non-domestic consumption decreased by 5% between 2012 and 2013, and the 2013 figure is almost 20% lower than the figure for 2005. This reduction may reflect improvements in energy efficiency, and may also be impacted by the recession, a continuing decline in manufacturing industries and an increase in service industries that are less energy intensive (Scottish Environment Statistics Online, 2015).

Non-domestic users are classified on the basis of those consumers who have a gas demand greater than 73,200 kWh per year, which in practice means a proportion of small business users are included in the domestic category rather in the non-domestic category. Additionally, gas use by power stations, some large industrial users, and a relatively small quantity of gas not supplied via the National Transmission System, is excluded from the figures (DECC, 2014a).

While the Digest of UK Energy Statistics (DUKES) is compiled using a top-down approach, with statistics gathered by energy companies on a national level, sub-national datasets are compiled using a bottom-up approach, from an initial set of individual Meter Point Reference Number (MPRN) data. At sub-national level, the figure provided to the DECC for energy consumption analysis for the Gas Industry is in the form of the Annual Quantity (AQ). This is based on (MPRN) data provided by Xoserve and independent gas transporters (DECC, 2014a).

The formula for calculating the AQ represents an estimate of the consumption at a meter point (a single point of gas supply) for a 365-day year, under seasonal normal weather conditions. The AQ is based on the consumption between two meter readings, which are unlikely to be taken precisely 365 days apart. To account for this, the AQ calculation adjusts for the bias of the read period towards winter or summer, and for the difference from seasonal normal conditions (DECC, 2014b).  This means that the data has been adjusted to account for differences in temperature and wind each year within the specific geographic area. This correction is applied to allow for more consistent comparison of gas consumption over time.  However, this limits the ability of the indicator to reflect the effects of climate change.  The current data sources available to DECC do not allow for removal of the weather correction factor from the annual quantities (DECC, 2014a). A full description of the calculation is detailed in the methodology section.

Department of Energy & Climate Change (DECC) (2012). Energy Security Strategy. Available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/65643/7101-energy-security-strategy.pdf

Department of Energy & Climate Change (DECC) (2014a). Sub-national consumption statistics: Methodology and guidance booklet. Available at: https://www.gov.uk/government/publications/regional-energy-data-guidance-note

Department of Energy & Climate Change (DECC) (2014b) Overview of weather correction of gas industry consumption data. Available at: https://www.gov.uk/government/statistics/overview-of-weather-correction-of-gas-industry-consumption-data

National Energy Efficiency Data framework (NEED) (2014). Summary of Analysis 2014. Available at: https://www.gov.uk/government/statistics/national-energy-efficiency-data-framework-need-report-summary-of-analysis-2014

National Grid (2012). Gas Demand Forecasting Methodology. Available at: http://www.nationalgrid.com/NR/rdonlyres/71CFD0F6-3607-474B-9F37-0952404976FB/52071/GasDemandForecastingMethodologyFeb12.pdf

National Records of Scotland (NRS) (2014). High Level Summary of Statistics: Population and Migration. Available at: http://www.nrscotland.gov.uk/files/statistics/high-level-summary/j11198/j1119800.htm

OFGEM (2014). Non-Domestic Renewable Heat Incentive (RHI). Available at: https://www.ofgem.gov.uk/ofgem-publications/92035/rhi1gwmilestone.pdf

Palmer, J. & Cooper, I. (2013) United Kingdom housing energy fact file. DECC. Available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/345141/uk_housing_fact_file_2013.pdf

Scottish Environment Statistics Online (2015). Total amount of gas consumed in Scotland: 2005 – 2013. Available at: http://www.gov.scot/SESO/DatasetSearch.aspx?TID=197

The Scottish Government (2009). Renewable Heat Action Plan for Scotland. Available at: http://www.gov.scot/resource/doc/290657/0089337.pdf

The Scottish Government (2013). Low Carbon Scotland: Meeting the Emissions Reduction Targets 2013-2027: The Second Report on Proposals and Policies. Available at: http://www.scotland.gov.uk/Resource/0042/00426134.pdf

The Scottish Government (2014). Energy in Scotland Compendium 2014. Available at: http://www.scotland.gov.uk/Resource/0044/00444530.pdf

The Scottish Government (2015). Energy in Scotland 2015. Available at: http://www.scotland.gov.uk/Resource/0046/00469235.pdf

This indicator was produced by Ailsa Strathie, Lynne Jack and colleagues at Heriot-Watt University with input from Darcy Pimblett (CXC) and Katherine Beckmann (Heriot Watt and CXC).