Budget: Osborne ignites new dash for gas

13th April 2012


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  • Pollution & Waste Management ,
  • Generation

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IEMA

Gas will be the largest source of UK electricity in the coming years, the chancellor announced, fuelling a second dash for gas by giving oil and gas producers £3 billion to help extract new reserves in UK waters.

The extra money follows the disclosure by energy and climate change secretary Ed Davey that gas-fired power stations, with a 450g/kWh-base level will not be subject to the planned emissions performance standard until 2045, so new plants coming on stream over the next few years can continue to emit CO₂ at existing levels for another three decades.

DECC says the “grandfathering” – whereby plants are exempt from new, more restrictive pollution laws if they remain below the 450g threshold – will provide investors with long-term certainty, even though the Committee on Climate Change said in January 2011 that the UK had to largely decarbonise its electricity generation to meet its carbon budgets.

It estimated that average emissions from electricity generation would need to fall to around 50gCO₂/kWh by 2030. However, the secretary said: “I want a decarbonised grid in the long term, but we can’t take our foot off the gas for some time yet. A fifth of the UK’s ageing fleet of power stations will close this decade and it’s not possible to fill that gap entirely with low-carbon alternatives in that timescale.”

“We need to recognise that gas will be a vital part of the mix in delivering affordable and secure low-carbon energy,” said the chancellor, who also claimed that gas was cheap despite rising wholesale prices recently pushing up UK energy bills.

“A new dash for gas will destroy the UK’s leadership on climate change and will leave UK citizens at the mercy of rising and volatile fossil-fuel prices. It’s staggering that the Treasury is bending over backwards to support a fuel that is to blame for 80% of the recent hike in energy bills,” commented Keith Allott, head of climate change at WWF UK.

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