REA nervously awaits Gas Strategy
Investment in gas must be on level playing field and not to detriment of renewables - Government urged to acknowledge significant role of renewable gas.
The REA is keen to see a Gas Strategy which is in line with the Government’s renewable energy and carbon objectives, and is calling on Government to ensure that gas fired power generation will complement, and not compete with, achieving 30% of UK electricity from renewable sources by 2020.
The media have widely reported that the Chancellor will announce tax breaks for shale gas exploration as his colleagues in Doha seek a global agreement on reducing CO2 emissions. The REA hopes this will not be the case. The International Energy Agency has called for an end to global subsidies for fossil fuels, which it estimates at over six times the global subsidies of renewables. In addition the Chancellor personally signed up to a communiqué in Mexico City in November, alongside other G20 finance ministers, which promises to “rationalize and phase-out over the medium-term inefficient fossil fuel subsidies that encourage wasteful consumption”.
REA Chairman Martin Wright comments:
“The IEA and the World Bank are sounding the alarm that we need to transform our energy systems urgently to avoid a temperature rise of four degrees. It will be ironic if the Chancellor fires the starting gun on a second ‘dash for gas’ – controversially shale gas at that – even as his colleagues scrabble for progress in Doha.
“There should be no question of a conflict between gas and renewables. Gas could complement the growth of renewables, but a massive expansion will jeopardize climate change objectives. It is significant that last week the Energy Bill was announced by DECC, whereas it is the Chancellor who is announcing the Gas Strategy. When taken with the failure to set a carbon reduction target in the Bill, and an Emissions Performance Standard for gas that fails to bite until 2045, it appears that central Government is prioritising fossil fuels over renewables.”
Investment in renewables is already in decline owing to prolonged instability in the policy framework. The Energy Bill was a boost for industry confidence, but consistency in Government messaging is key. Martin Wright continues:
“Given the value of final investment decisions in renewables has fallen to half that of 2010 levels, we urgently need Government to apply maximum effort to securing recovery for renewable energy investment. That means vigorously addressing the barriers EMR still presents to renewables and making it abundantly clear that the Gas Strategy is not intended to, nor will, undermine the climate for renewables investment.”
The REA is also calling on the Government to acknowledge the role of renewable gas. Biomethane injection can reduce greenhouse gas (GHG) emissions and improve the energy security of our gas grid.
REA Head of Biogas David Collins said:
“There is huge future potential in the UK for the generation of renewable gas from anaerobic digestion and gasification technologies. Biogas plants can also cut methane emissions from landfill and farm slurries and replace mineral fertilisers, providing farmers with great opportunities for economic diversification.
“National Grid estimates that if exploited fully, biomethane could provide at least 15% of our residential gas supply. We call on the Government to recognise the immense potential of green gas and to demonstrate high level commitment to working with industry to ensure this technology can fulfil its potential.”
The REA is looking forward to engaging with DECC on the implementation of the Electricity Market Reform package introduced in the Energy Bill published last week.