In this article, we will take a look at 10 of the 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.
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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 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.
5. Iberdrola (Scottish Power)
2021 Revenue: $46.276 billion
Iberdrola is a multinational based in Spain that owns one of the UK’s biggest energy companies, Scottish Power. As a leading utility, Scottish Power supplies electricity to more than 5.5 million customers in the UK and is the largest producer of wind energy in the nation. The company also generates energy through hydro-electric power stations and other sustainable resources.
As for Iberdrola, the company is a leading renewable multinational that expects by the end of the decade to”exceed €65 billion in network assets and 100,000 MW of capacity, more than 80% renewable, thanks to new investments of between 65 and 75 billion between 2026 and 2030″. In 2021, Iberdrola generated revenue of $46.276 billion, ranking it among the largest energy companies in the world.
4. E.ON (E.ON Energy UK)
2021 Revenue: $91.522 billion
E.ON is German electric multinational that owns one of the UK’s largest energy companies, E.ON Energy UK. According to the company, E.ON Energy UK is one of the UK’s leading energy providers with 8,000 employees and 5.6 million customers in the country. Given its focus on renewables, E.ON Energy UK has invested £3.5 billion in UK renewables since 2009 and the company will likely invest even more in the future.
Like E.ON Energy UK, E.ON is also a leading utility company given it is one of Europe’s largest operators of energy networks and energy infrastructure. In 2021, E.ON reported revenue of $91.522 billion, making it one of the largest companies in the world.
3. Électricité de France (EDF Energy)
2021 Revenue: $99.926 billion
Électricité de France is a French company that owns one of the UK’s biggest utilities, EDF Energy. EDF Energy is Britain’s biggest generator of zero carbon electricity with an operational portfolio of 36 wind farms and an ambitious vision for solar and battery storage. For the future, EDF Energy plans to invest in low carbon technologies in the UK worth more than £50bn by 2035. According to the company, the investment could amount to 15GW of wind, solar and nuclear and meet around one fifth of UK demand.
As for Électricité de France, the company is also an electric utility that is also dedicated to increasing the share of renewable energy generation. In 2021, Électricité de France had revenue of almost $100 billion, which ranks it #3 on our list of 10 Biggest Energy Companies in the UK.
2. BP plc (NYSE:BP)
2021 Revenue: $164.195 billion
BP plc (NYSE:BP) is a leading oil and gas producer based in the UK that ranks #2 on our list of 10 Biggest Energy Companies in the UK with revenues of $164.195 billion for 2021. Given that oil and gas prices are higher in 2022 than 2021, the company’s 2022 revenue will likely be higher than what it was last year. In terms of the near term, BP plc (NYSE:BP) said of the third quarter and what the company expects in the fourth quarter,
Starting with gas prices where we continue to see significant volatility. During the quarter, reduced Russian pipeline imports led to sharp increases in both spot and futures prices in Europe with the quarter average TTF price rising by 92%. Prices also rose in the US as summer cooling demand offset the loss of Freeport LNG exports. Looking ahead to the fourth quarter, we expect gas prices to remain elevated and volatile with the outlook heavily dependent on Russian pipeline flows and the severity of the Northern Hemisphere winter.
Moving to oil prices. During the third quarter, Brent averaged $101 per barrel, down from $114 per barrel in the second quarter. This reflected increased uncertainty around the economic outlook and the continued COVID-related lockdowns in China. Despite this uncertainty, we expect oil prices to remain elevated in the fourth quarter given the backdrop of low inventory levels, OPEC+ supply cuts, limited supply growth and uncertainty around Russian exports.
1. Royal Dutch Shell plc
2021 Revenue: $272.657 billion
With 2021 revenue of $272.657 billion, the oil and gas supermajor Royal Dutch Shell plc ranks #1 on our list of 10 Biggest Energy Companies in the UK. Given oil and gas prices are higher in 2022 than in 2021, there’s a good chance that Royal Dutch Shell plc’s revenue for 2022 will also be higher. With the high oil and gas prices, Royal Dutch Shell plc reported adjusted earnings of $9.5 billion in Q3 2022 and adjusted EBITDA of $21.5 billion.
You can also take a look at 15 Largest IPOs of All Time Worldwide and 20 Most Admired Companies in the World in 2022.
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Disclosure: None. 10 Biggest Energy Companies in the UK is originally published on Insider Monkey.
