The second dash for gas has begun

The quiet and underreported Government announcement this week to approve the construction of three new gas fired power stations marks the beginning of Britain’s second dash for gas. This is not something we should welcome. It means that we are locking ourselves into a high carbon future and becoming more energy insecure. Whilst our first dash for gas was founded on secure North Sea reserves, the second is reliant on insecure Russian supplies and is purely the result of a failing energy policy. Simply, the investment in renewables, nuclear and carbon capture and storage (CCS) hasn’t been sufficient to replace decommissioned capacity or decarbonise our energy infrastructure. This dire situation was entirely avoidable in 1997, but after 7 major energy policy realignments since then, essential investment has been thwarted by uncertainty and confusing signals from Government. Moreover, Britain’s energy markets still fail to adequately incentivise investment in the most cost-effective low carbon technologies and also in capacity, which is essential for ensuring the resilience of our energy networks. The construction of these power stations will make it harder and more expensive to meet our ambitious 80 percent emissions reduction target by 2050. It will leave us with three options over their 30 year lifetime: decommissioning and replacement with lower carbon generation capacity, their retrofit with CCS and/or the use of UK created biogas as their fuel. The first option will be prohibitively expensive, the second will require significant support from government and the third will need us to change the way we view and manage waste. Retrofitting these power stations with CCS is the option favoured by the Government, but it has presided over a lengthy and widely criticised competition to build the first CCS demonstration power plant in Britain. Given the slow pace of progress under this Government, it is almost impossible to predict if and when CCS could be retrofitted and at what cost. The second dash for gas is one of the least attractive energy policy scenarios. It has been forced on Britain because of government complacency and the maintenance of an energy policy unable to deal with the challenges of decarbonisation and declining North Sea reserves. The reforms needed to sort out this mess have been set out in more detail elsewhere (see: http://www.policyexchange.org.uk/images/libimages/469.pdf) and it is critically important that we implement them. Ben Caldecott is head of Policy Exchange's Energy and Environment Unit.