Aswell as possible tax breaks for producers of shale gas, chancellor George Osborne signalled in his Autumn Statement that between 26-37GW of new gas-fired electricity generating capacity will be built by 2030 to replace retiring coal and nuclear plants.
The REA and STA have now spoken of their fear that rather than complimenting an expansion of renewable deployment in the generation sector, the major role of gas could undermine the growing case for green technology and send the wrong signals to investors.
The Renewable Energy Association (REA) has drawn attention to the fact that gas prices will remain volatile whilst our continued dependence on fossil fuels will do little to combat climate change.
Martin Wright, The REA’s chairman, said: “The chancellor must understand that gas is not cheap, nor does it offer stable pricing in the future. It has been by far the major driver of energy bill increases in recent years, and there is no evidence for the presumption that shale gas will have the same impact on pricing here as it has in the UK.
“Osborne and the gas strategy show that the UK doesn’t seem to be able to break its habit on fossil fuel, even as climate change ministers negotiate in Doha. The announcements send a clear signal about the government priorities and investors will respond to that.
“The UK has some if the best renewable source in the world, which are totally sustainable and which offer stable low-cost energy in future – we should prioritise exploiting those.”
The Solar Trade Association (STA) has accused the chancellor of showing short-sightedness as the costs of solar power continue to reduce. It says that relying on gas for our energy needs will not only become much more expensive by the next decade, it will do nothing to stimulate investment in clean energy.
STA head of external affairs, Leonie Greene, said: “Whatever the chancellor’s plan for gas, solar will come into its own in the next decade as households increasingly chose to supply themselves with solar power without subsidy. It is ironic that the Treasury has a poor grasp of the relative cost of energy generation technologies in the next decade.
“We hoped the gas strategy would leave no room for doubt that government will ensure investment in gas must compliment the delivery of binding 2020 renewable energy targets. That is not the case and it begs the question if government is running two parallel energy strategies, to the extent to which they are in competition.
“The government should urgently prioritise sorting out the policy framework for renewables, because investment is floundering. Instead it seems to be putting huge resources into promoting fossil fuels, while solar is subjected to repeated delays.”