From heating and lighting to transport, industry and communications, energy is fundamental to almost everything we do, which is why the UK energy industries? contribution to the economy is so important. The UK has large coal, natural gas and oil reserves, which is important as increases in energy prices, such as oil, will benefit the large number of UK oil exporters. Primary energy production accounts for 10% of GDP, one of the highest shares of any industrial nation. It is also a major employer ? around 164,600 people are directly employed in the energy industries.
In 2002, the Chief Scientific Adviser, Sir David King, published a review of government support for energy research, development and demonstration activities. This was commissioned by the Secretary of State for Trade and Industry to inform the wider review of energy policy (2003). The report helped to inform the development of the 2003 Energy White Paper, and recommendations included the establishment of a new UK Energy Research Centre, which is now operational.
On 25 January 2006, Sir David King joined Paul Golby, Chief Executive of Eon Energy, in launching and co-chairing a new ?Energy Research Partnership?, a high-level forum of key funders of energy research and development from across the public and private sectors who are working together to give strategic direction to UK energy research, development, demonstration and deployment.
In a related development, the Chancellor announced in his 2006 Budget Speech the establishment of a new National Institute for Energy Research. He said his ambition was that the Institute might be funded up to £1bn over a lifetime of perhaps 10 years, drawing 50:50 from public and private sector investment.
The government?s report on the Energy Review was released in July 2006. It aims to put the UK in a position to meet the two major long-term challenges in UK energy policy: