UK Chancellor’s Autumn Statement confirms a ‘dash for gas’

Posted at December 7, 2012 » By : » Categories : News » Comments Off on UK Chancellor’s Autumn Statement confirms a ‘dash for gas’

Despite widespread condemnation, the UK Chancellor George Osborne’s Autumn Statement yesterday opened up the way for a massive expansion of gas power.

The government’s Gas Strategy outlines the need for up to 26 GW of new gas generating capacity by 2030 to replace retiring coal, older gas and nuclear power stations.

Osborne and Energy Secretary Ed Davey maintain that new gas capacity is needed to keep the lights on and is compatible with the UK’s carbon budgets.

“We have always said that gas will have a significant role in our electricity mix over the next two decades,” commented Davey in a statement yesterday backing up the Chancellor. “Gas will provide a cleaner source of energy than coal, and will ensure we can keep the lights on as increasing amounts of wind and nuclear come online through the 2020s.”

The government is also pressing ahead with shale gas, establishing an Office for Unconventional Gas and Oil under the auspices of the Department for Energy and Climate Change to bring together the relevant responsibilities from across government departments and providing a single point of contact.

While the government maintains that any extraction of shale gas will have to meet “high standards of safety and environmental protection”, it says it will make a decision on whether Cuadrilla can restart fracking in the Northwest shortly.

The Autumn Statement has been roundly criticised by the environmental sector, with executive director of Friends of the Earth, Andy Atkins, commenting:
“Osborne’s statement smacks of the crass short-term desperation that’s fast becoming the hallmark of this government – it will do nothing to build a strong, future-proofed economy or safeguard our planet. MPs must stop this reckless, headlong dash for gas and insist on an energy strategy that puts the long-term interests of the nation first – by investing in energy efficiency and the huge potential of the wind, waves and sun.”

Meanwhile, chair of the Renewable Energy Association Martin Wright warned that gas is not cheap and will not offer stable pricing in the future.

“It has been by far the major driver of energy bill increases in recent years, and there is no evidence for the presumption that shale gas will have the same impact on prices here as it has in the USA. Moreover, increasing demand from other economies will undoubtedly drive prices and volatility,” he cautioned.

The Gas Strategy sends a clear signal that the UK is still locked into fossil fuels – and investors will respond to that apparent priority, Wright says. Instead of playing a supporting role for renewables in the short to medium term, gas has been placed centre stage.

“Ironically we are getting a cross-departmental Office for Unconventional Oil and Gas, when what the UK needs is an effective cross-departmental Office for Renewable Energy Deployment,” he says.

The government’s Gas Strategy also misses a golden opportunity, making no mention at all of renewable gas from anaerobic digestion or gasification of waste, which National Grid has estimated could provide a quarter of the UK’s domestic gas supply.

“Renewable gas can make a vital contribution to boosting the domestic security of our gas grid. It also has excellent emissions and landfill displacement properties and provides tremendous economic opportunities for farmers and small businesses,” he says.

Even chief executive of utility E.ON UK, Tony Cocker, said:
“We see a future where UK electricity generation is balanced by gas but not based on gas.”

Although he echoes the Chancellor’s comments by saying:
“Gas will play a vital role in securing a low carbon electricity system by providing a flexible back-up to renewable generation and replacing our already ageing coal, oil, gas and nuclear plants. More efficient gas-fired CHP plant… should have an important role to play in the UK gas strategy to ensure that gas plant continues to deliver significant reductions in carbon emissions.”

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Related stories:
UK government set to approve 30 new gas power stations (4-Dec)
Benefits of US switch to shale gas overstated, say researchers (29-Oct)
Shale gas no ‘silver bullet’ for UK but will bring benefits (19-Sept)
IEA sets out rules for ‘golden age of gas’ (31-May)

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