What’s the UK’s gas generation strategy?
The Gas Generation Strategy was presented to Parliament in December 2012 and sets out the Government’s view on the role gas can play in the UK’s future electricity market. The Strategy sets out three possible gas scenarios, which would lead to different levels of decarbonisation of the electricity system.
Specifically, the strategy sets out how the Government plans to address barriers to investment in gas power plants, as identified in an initial stakeholder consultation, to help encourage the delivery of the gas power plant capacity needed to meet the UK’s energy needs.
Measures put forward in the strategy include setting a cap on low-carbon expenditures through the Levy Control Framework (which defines how much energy bills may increase through low-carbon policies to 2020), enabling greater flexibility in the planning system (for example, to allow consented or prospective projects to undergo some technological changes), and establishing a new Office for Unconventional Gas and Oil, to act as a point of contact for potential investors. Full details of the range of measures put forward by the Government are given in the Gas Generation Strategy.
There are some inconsistencies between the Gas Generation Strategy and the UK’s wider decarbonisation ambitions and targets.
Firstly, the strategy suggests that the UK’s carbon budgets could be relaxed in order to allow more natural gas to be burnt for electricity, which could undermine efforts to reduce emissions cost-effectively. The strategy’s central scenario builds on the assumption that by 2030, the carbon intensity of the power sector will be twice as high as the level recommended by the Committee on Climate Change in its fourth carbon budget.
There is also a risk that the implementation of the high carbon intensity scenario in the strategy could undermine efforts to decarbonise the UK’s power sector. Analysis by the Grantham Research Institute suggests natural gas may play a role in the transition to a low-carbon electricity system, but can only play a significant role beyond the 2020s if CCS technology is deployed on a commercial scale. At present, the gas generation strategy fails to fully acknowledge these challenges.
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