Energy Secretary Ed Davey

Gas boost 'consistent' with emissions aim

Substantial investment in new gas power plants in the UK is ‘completely consistent’ with targets to cut emissions, Britain’s Energy Secretary Ed Davey says.

Davey also said today he hoped it would be possible to give the green light to unconventional shale gas, which is extracted using the controversial process of "fracking".

Davey's comments come as businesses lined up to warn the government that support for future gas power and a failure to sign up to targets to slash emissions from electricity generation are undermining needed investment in the power sector.

In two separate letters, a range of major companies have urged the government to set a target to decarbonise the power sector by 2030 to provide the long-term certainty needed to drive investment in energy infrastructure.

The coalition has been divided over future energy supplies, with the Lib Dem Energy Secretary seeing off Tory calls for significant cuts to onshore wind farm subsidies in the summer – at the price of support for gas up to and beyond 2030.

Today Davey told the GasTech industry conference in London that the UK was "good at gas – we like gas".

As the cleanest fossil fuel, which currently makes up more than a third of UK primary energy use, he said it was helping many countries including Britain cut carbon emissions, and would be as important for some years as it had been in the past.

He said gas would play an important role in ensuring security of electricity supplies, which will need to increase as heating and transport are electrified to cut emissions, as well as be the key energy source for heating buildings.

The government was encouraging diverse and efficient liberalised gas markets, encouraging energy efficiency measures and supporting the opening of new supply routes, Davey said in a speech to the conference.

And he pointed to the UK's development of carbon capture and storage technology, which catches and permanently stores carbon emissions from fossil fuel plants underground, as a way to continue using gas, and to cut greenhouse gases globally.

But he also said: "I see unabated gas playing a very significant role throughout the 2020s, and, increasingly as back-up or with carbon capture and storage, through the 2030s and 2040s."

He added: "A substantial investment in gas generation and gas import infrastructure here in the UK is completely consistent with Britain's plans to cut carbon emissions, set out in our carbon plan."

He said around 20 gigawatts of new gas capacity – without the technology to trap emissions – would be built between now and 2030, potentially up to 20 power plants.

But he sounded a note of caution over shale gas, a major industry in the US but one which raises concerns over contamination of water supplies, and has caused two small tremors near the only site where exploration is being attempted in the UK.

He said questions about regulatory oversight and the involvement of local communities needed to be answered, not simply dismissed, and any new energy source must be consistent with efforts to cut carbon emissions.

"But in the context of the government's green light for carbon capture and storage of fossil fuel plants and in the light of evidence of the best regulatory regime, I hope it will prove possible for me to give a green light to shale," he said.

Friends of the Earth's head of campaigns, Andrew Pendleton, said: "Ed Davey simply doesn't get it – maintaining the UK's heavy gas reliance for the next two decades poses a major risk to our climate targets and could send household fuel bills soaring.

"Rocketing gas prices have been the main driver of recent bill rises that have pushed poorer households into fuel poverty and cost businesses dearly.

"It's time to commit Britain to an unequivocally clean energy future, with less gas, lots of wind, wave and solar power and a massive drive to slash energy waste."

At the Tory Party conference in Birmingham, Chancellor George Osborne said the government was consulting on a "generous new tax regime for shale" so the UK was not left behind as gas prices fell in the US, where shale gas is being widely exploited.

The Treasury said a targeted tax regime would help unlock investment in shale gas, which had the potential to create jobs and support energy security.

But Jim Footner, head of Greenpeace's energy and climate campaign, said: "Osborne needs to stop giving handouts to his mates in the gas industry and instead back his Lib Dem coalition partners and the CBI by supporting investment in renewable technologies that will help stabilise bills, reduce our reliance on energy imports and boost the economy."

Shadow energy and climate change secretary Caroline Flint said: "The Tory-led government's energy policy is in turmoil with division and incompetence harming the UK's ability to secure investment for low-carbon energy and jobs, fairer prices and more competition.

"The transformation of our economy and a new energy industrial revolution are a huge opportunity, with the potential to create 400,000 jobs and support growth, when we need them more than ever.

"We need a One Nation government which will seize the opportunity to create jobs and growth across Britain, but instead with this Tory-led government and their Lib Dem allies, Britain risks falling even further behind, sending jobs, growth and industries that should be coming to this country overseas."

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