The Role of Energy in the Circular Economy


John Thompson is a seasoned energy consultant with a deep commitment to environmental sustainability.

With an Oxford education and over 15 years in the industry, John’s expertise lies in simplifying complex energy concepts to help businesses reduce consumption and save money.

An avid hiker and bird-watcher, John brings his passion for the outdoors into his work.

The concept of the circular economy is gaining momentum as a sustainable approach to resource management. It aims to reduce waste, promote reuse and recycling, and minimise environmental impact. Energy plays a crucial role in achieving a circular economy by powering the necessary processes and enabling the transition to more sustainable practices. In this article, we will explore the significance of energy in the circular economy and provide practical advice and actionable tips for individuals, businesses, and policymakers in the UK.

Energy Consumption and Waste Generation

Understanding the scale of energy consumption and waste generation in the UK is essential to address their environmental impact and identify opportunities for improvement. Consider the following statistics:

Energy Consumption

In 2020, the total energy consumption in the UK was estimated to be around 1,700 terawatt-hours (TWh). This includes energy used across various sectors such as residential, commercial, industrial, and transportation. Energy consumption is measured in TWh, which represents the amount of energy consumed in a billion kilowatt-hours.

During that period, renewable energy sources accounted for approximately 43% of the overall energy mix. This includes energy generated from renewable sources such as wind, solar, hydro, biomass, and others. The increasing share of renewables indicates a growing shift towards cleaner and more sustainable energy production and consumption in the UK.

Waste Generation

The UK generated an estimated 220 million tonnes of waste in the period of 2020-2021. This waste includes municipal waste, commercial waste, industrial waste, and construction and demolition waste. Waste generation is influenced by population, economic activities, consumption patterns, and waste management practices.

However, specific data on the percentage of waste sent to landfill during that period is not readily available. Waste management practices can vary, and waste diversion rates (the amount of waste diverted from landfills through recycling, composting, or energy recovery) can fluctuate over time. It is important to note that landfill diversion rates are influenced by government policies, recycling initiatives, and advancements in waste treatment technologies.

The high levels of energy consumption contribute to greenhouse gas emissions and other environmental concerns, while improper waste management exacerbates resource depletion and pollution. It is crucial to recognize the link between energy consumption and waste generation and adopt strategies to address both simultaneously.

Renewable Energy Sources

Utilising renewable energy sources is key to minimising the environmental footprint of energy production and consumption. In the UK, several renewable energy sources are available, including:

Wind Power

The UK is indeed a leader in offshore wind energy. As of 2021, the UK had a total offshore wind capacity of approximately 10.4 gigawatts (GW). This capacity includes operational wind farms located offshore, primarily in the North Sea and Irish Sea. The UK has been actively investing in offshore wind projects to expand its renewable energy capacity and reduce carbon emissions.

Solar Power

Solar installations have witnessed significant growth in the UK. As of 2021, the total installed solar capacity was around 13.6 GW. This capacity includes both large-scale solar farms and smaller-scale rooftop installations. The UK has been encouraging solar energy deployment through government support schemes and incentives.


Biomass power generation also plays a role in decarbonizing the energy sector in the UK. Biomass involves using organic materials, such as wood pellets, agricultural residues, and dedicated energy crops, to produce heat and electricity. In 2020-2021, the total biomass capacity in the UK was approximately 4.2 GW. Biomass power plants contribute to renewable energy generation while utilising sustainable feedstocks.

Advantages of incorporating renewable energy into the circular economy include reduced greenhouse gas emissions, energy independence, and job creation. Numerous successful projects, such as wind farms and solar installations, highlight the feasibility and benefits of renewable energy adoption.

Energy Efficiency Measures

Improving energy efficiency is crucial for optimising resource utilisation and reducing energy waste. Here are practical tips for enhancing energy efficiency in businesses and households:

  • Implement energy-saving technologies and equipment: Upgrade to energy-efficient lighting, heating, and cooling systems, and use energy-efficient appliances.
  • Conduct energy audits and assessments: Identify areas of high energy consumption and implement measures to reduce waste.
  • Promote behaviour changes and awareness: Educate employees and individuals about energy-saving practices, encourage responsible energy use, and implement energy conservation campaigns.
  • Utilise smart grid technologies and energy management systems: Monitor and manage energy consumption in real-time, optimise energy usage, and integrate renewable energy sources effectively.

The UK has witnessed successful energy efficiency initiatives in various sectors, including building retrofits, industrial processes optimisation, and smart metering programs.

Integration of Energy Systems

Integrating energy systems in the circular economy can lead to multiple benefits, including enhanced energy reliability, increased efficiency, and reduced environmental impact. The UK has implemented various integrated energy systems, such as:

Combined heat and power (CHP) plants: These facilities generate both electricity and useful heat, reducing energy waste and improving efficiency.

District heating and cooling networks: Localised systems distribute heat and cooling from centralised sources, reducing individual energy consumption.

Energy-from-waste facilities: These plants convert waste into energy, contributing to waste management and renewable energy production.

While integrating energy systems offers significant advantages, challenges such as infrastructure development and regulatory frameworks need to be addressed for successful implementation.

Energy Recovery from Waste

Energy recovery from waste plays a vital role in the circular economy by converting waste into a valuable resource. Various waste-to-energy technologies are available, including:

  • Incineration: Burning waste to generate heat and electricity.
  • Anaerobic digestion: Breaking down organic waste to produce biogas for energy generation.
  • Gasification and pyrolysis: Transforming waste into synthesis gas or bio-oil, which can be used for electricity or fuel production.

Energy recovery from waste offers benefits such as reducing landfill dependence, minimising methane emissions, and producing renewable energy. Notable examples in the UK include waste-to-energy plants and anaerobic digestion facilities.

Energy Storage Solutions

Effective energy storage is crucial for balancing energy supply and demand, managing intermittent renewable energy sources, and ensuring a reliable energy system. Various energy storage technologies can be implemented, including:

  • Battery storage systems: Storing electricity in batteries for later use.
  • Pumped hydro storage: Using surplus energy to pump water to a higher elevation and releasing it later to generate electricity.
  • Compressed air energy storage: Compressing air and releasing it to drive turbines during peak demand.

Implementing energy storage solutions provides grid stability, enhances the integration of renewable energy, and enables efficient energy utilisation. Noteworthy energy storage projects in the UK include battery installations, hydroelectric schemes, and innovative grid-scale solutions.

Policies and Regulations

Renewable Energy Incentives and Grants 

The UK government has implemented various incentives and grants to encourage renewable energy generation. Two key initiatives are:

Feed-in Tariffs (FiTs)

FiTs were a government support scheme that provided financial incentives to individuals, businesses, and communities for generating renewable energy. Under this scheme, renewable energy generators were paid for the electricity they generated and for any surplus energy exported to the grid. The FiTs scheme closed to new applicants in 2019 but played a significant role in promoting small-scale renewable energy installations, such as solar PV and wind turbines, in earlier years.

Contracts for Difference (CfDs)

CfDs are long-term contracts that provide stable and predictable revenue streams to renewable energy developers. The contracts guarantee a fixed price for the electricity generated from eligible renewable energy projects, ensuring investors’ returns and encouraging investment in large-scale renewable energy installations, particularly offshore wind farms.

Energy Efficiency Schemes

The UK government has implemented energy efficiency schemes to promote energy audits and efficiency improvements in large organisations. One key initiative is the Energy Savings Opportunity Scheme (ESOS). ESOS requires large organisations to conduct energy audits every four years, identifying energy-saving opportunities and recommending measures to improve energy efficiency. Through ESOS, businesses are encouraged to optimise their energy use, reduce waste, and identify cost-saving opportunities.

Environmental Regulations

The UK has implemented environmental regulations targeting waste management and landfill practices to reduce waste generation and encourage recycling. Key regulations and measures include:

Waste Management Regulations

The Waste (England and Wales) Regulations and the Waste (Scotland) Regulations set out rules and guidelines for waste management practices, including waste collection, treatment, and disposal. These regulations aim to promote waste reduction, recycling, and the responsible management of hazardous waste.

Landfill Taxes

The Landfill Tax is an environmental tax imposed on waste disposed of in landfill sites. The tax encourages waste diversion from landfills and incentivizes recycling and other sustainable waste management practices. Landfill operators are required to pay a tax based on the weight and type of waste they dispose of in landfills.

These policies and regulations demonstrate the UK government’s commitment to promoting renewable energy generation, improving energy efficiency, and driving sustainable waste management practices. They provide a framework and incentives for businesses, organisations, and individuals to adopt sustainable practices and contribute to the circular economy.

Collaboration and Partnerships

Collaboration between different sectors is essential for a successful energy transition. Examples of successful collaborations in the UK include partnerships between:

  • Energy companies and local authorities: Joint initiatives to develop renewable energy projects and implement sustainable practices.
  • Businesses and research institutions: Collaborations to innovate and improve energy efficiency technologies and practices.
  • Government and non-profit organisations: Joint efforts to promote energy conservation campaigns and raise awareness about the circular economy.

Businesses and organisations should actively seek partnerships and collaborations to foster knowledge exchange, share resources, and accelerate the transition to a circular economy.


Energy plays a fundamental role in achieving a sustainable and circular economy. By prioritising renewable energy, enhancing energy efficiency, integrating energy systems, and implementing energy recovery and storage solutions, the UK can drive positive change.

It is crucial for individuals, businesses, and policymakers to prioritise energy in their decision-making processes and contribute to a greener and more sustainable future. Let us work together to create a circular economy that benefits both the environment and society as a whole.

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