Chancellor to publish 'gas strategy'

4 December 2012
By Sofia Mitra-Thakur
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Gas-fired power plant

Gas-fired power plant

Chancellor George Osborne is to approve the construction of up to 30 gas-fired power stations as part of his Autumn Statement.

The publication of a "gas strategy" alongside the statement will add further detail to the government's plans to keep the UK's lights on over the coming decades, outlined in last week's Energy Bill.

It is understood that Mr Osborne will seek to encourage investment in gas through possible tax breaks and a new regulatory regime for innovative methods of extracting gas from shale through so-called "fracking".

The announcement is likely to delight Conservative MPs who see gas as the route to cheap energy bills for consumers, but dismay environmentalists who fear the impact of fracking - already implicated in mini-earthquakes in Lancashire - and would rather see efforts directed at renewable sources of power, like wind and solar.

According to the Financial Times, Mr Osborne's strategy will say that "in 2030, we could need more overall gas capacity than we have today".

This could mean 30 new gas-fired power stations to produce 26 gigawatts of electricity, replacing ageing coal, nuclear and gas plants.

But if the UK's carbon reduction targets are reined back, this could rise to 37 gigawatts by 2030 - half of Britain's generation capacity.

Mr Osborne is expected to establish an Office for Unconventional Gas to oversee the development of the shale gas industry and arbitrate in disputes with opponents of fracking.

The Energy Bill published by Energy Secretary Ed Davey last week will allow ministers to treble investment in low-carbon power generation to £7.6 billion by 2020, but also left the door open for the development of more plants run on carbon sources, like gas.

Its failure to include a target to slash emissions from the electricity sector by 2030 led to criticism from environmental groups.

Greenpeace energy campaigner Leila Deen said: "By finally hitting his stride in his dash for gas, Chancellor George Osborne has pitted himself against his own coalition colleagues, the majority of the British public who want clean not dirty energy, and a growing number of investors, businesses, church groups and civil society organisations calling for the government to clean up the UK's energy sector.

"His proposals will drastically increase this country's reliance on expensive, polluting gas, which in turn could push up bills, scare off low-carbon investors and make a mockery of the UK's climate change commitments.

"The Independent Committee on Climate Change has warned Osborne's dash for gas might be illegal because it could breach the UK's carbon reduction targets, but he's clearly ploughing on regardless."

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