Member Article

Government seek to reassure gas investors

Secretary of State for Energy and Climate Change, Edward Davey has set out new measures to give investors in gas come certainty.

Mr Davey said electricity generated from gas still has an important role to play, alongside renewables and nuclear, as we make the transition to a low carbon economy.

The Government intends to bring forward legislation to limit the emissions from an individual plant, through the Emissions Performance Standard, and the Capacity market will be designed to bring forward sufficient investment in new reliable capacity, including gas.

A new gas generation strategy was also announced for publication in Autumn, focusing on ensuring security of supply by setting out any necessary government interventions needed to address barriers to investment.

Mr Davey 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.

“Gas will continue to play a vital role in a low-carbon economy. Modern gas-fired power stations are relatively quick to build and twice as clean as many of the coal plant they’re replacing. Carbon capture and storage promises to give gas an even longer term future in the mix.

“A substantial number of new projects are already in the pipeline and I’m keen to hear the views of industry and investors to make sure our reforms give them sufficient certainty.

“This is all part of our commitment to transforming the market, providing long-term certainty to investors, increased competition, and the best deal possible for consumers.”

As the UK moves towards 2050 carbon reduction targets, efficient gas-fired plants can emit half the greenhouse gas emissions of coal equivalents, and present a flexible energy source.

George Osborne reaffirmed the Government was trying to provide certainty to gas investors.

He said: “As we work towards a new gas strategy in the autumn, Treasury ministers will host a roundtable with the industry to hear their views on what the Government can do to encourage investment.

“We are also working hard to support the energy sector investment more broadly, including in the UK’s oil and gas resources in the North Sea.”

This was posted in Bdaily's Members' News section by Tom Keighley .