UK Chancellor backs renewables but gives shale gas a tax break

Posted at October 10, 2012 » By : » Categories : News » Comments Off on UK Chancellor backs renewables but gives shale gas a tax break

In his headline speech to the Conservative Party annual conference yesterday, Chancellor George Osborne promised investment in renewable energy but also new tax breaks for shale gas.

At the end of his address, he promised that the government would be “relentless activists” for new infrastructure, roads and power plants.

Osborne committed the government to an “enterprise strategy” that will mean investment in renewable energy, he said, but also opening up the country’s newly discovered shale gas reserves.

In his speech, Osborne announced that the government is to start a consultation on a “generous new tax regime” for shale gas to ensure that the UK is not “left behind” as gas prices come down in the US.

While many in the low-carbon community will be delighted at the hint of a more positive approach to renewables there will also be dismay that the only concrete activity announced by the Chancellor is tax cuts for shale gas.

“Generous shale gas tax breaks show the Chancellor clearly isn’t listening to the increasingly vociferous warnings from leading politicians, businesses and climate experts about his reckless dash for gas,” commented Craig Bennett, director of policy and campaigns at Friends of the Earth.

Yesterday, over 50 of the country’s largest businesses and industry bodies wrote to the Chancellor urging him to embrace a 2030 decarbonisation target or risk losing millions of pounds of potential investment in the UK.

Friends of the Earth add that seven major power companies including Alstom, Areva, Doosan, Gamesa, Mitsubishi, Siemens and Vestas have also written to the Energy Secretary Ed Davey with the same request, even though many of them are building gas power stations.

“The green economy is one of the fastest and only growing parts of the overall economy… but with a fossil-fuelled economic strategy firmly rooted in the 1970s, Osborne is looking increasingly incapable of dealing with the challenges and opportunities,” says Bennett.

John Cridland, director-general of the business lobby group the CBI, also agrees that the exploration of shale gas must sit alongside investment in renewables.

“It makes sense to maximise the amount of energy we can produce at home at reasonable cost [but] I don’t want all my eggs in one energy basket,” he said.

Meanwhile, Energy Secretary Ed Davey has told the GasTech conference in London that investing in new gas infrastructure and generating capacity will help Britain cut carbon emissions.

“Gas will continue to be the key energy source for heat in many of our buildings in Britain, for years to come,” he said, adding, “in electricity generation too, I see unabated gas playing a very significant role throughout the 2020s, and, increasingly as back-up or with carbon capture and storage, through the 2030s and 2040s.”

He argued that backing gas is “pragmatic” and “completely consistent” with the UK’s plans to cut carbon emissions by switching the country away from coal power in the short term and investing in carbon capture and storage in the future.

For further information:

Related stories:
UK businesses calls for 2030 carbon target to unleash investment (8-Oct)
UK coal generation up 60% but renewables taking off (1-Oct)
Climate Change Committee condemns UK government’s ‘dash for gas’ (14-Sept)
UK Energy Secretary defends Energy Bill against “myths” (12-Sept)

Article source:

About admin

Comments are closed.