Wednesday, 7 August 2013

Why the 'dash for gas' has got off to a false start

Dorothy Thompson, boss of the coal-fired Drax station, suggested she might invest in gas last week. Photograph: Rex Features

For all the talk of a dash for gas, the government-backed race for a new generation of power stations has had few willing participants thus far. So the suggestion last week by the chief executive of Drax, the UK’s biggest coal-fired power station, that she might invest in new gas plants was a surprise. Nonetheless, her words were hedged with a caution shared by the rest of the energy industry. “We could start to look at it. But it would depend very much on the details of the government’s energy market reforms,” said Dorothy Thompson.

But even with the caveats, this was the biggest expression of enthusiasm for new gas power that the UK has seen in some time. The government is desperate to bring new gas-fired energy generation on stream, as a way of avoiding shortfalls in electricity supply when ageing coal and nuclear power stations are taken out of service. But there is a marked absence of building projects and a distinct chill where new investment is concerned.

At least 14GW of new gas-fired power stations have received planning consent, according to the Department of Energy and Climate Change. So in theory construction work on this new dawn of gas power could start immediately. But there is only one such station being built – the 800MW Carrington plant in Manchester, owned by Irish utility ESB – and none of the big companies have active plans to begin work on any others. Centrica, owner of British Gas, confirmed last week that its plans for a site in King’s Lynn were still on hold.

Scottish and Southern Energy made a pointed reference to the government’s electricity market reform, which aims to ensure that there is enough investment in power generation to avoid blackouts, while meeting 2050 greenhouse-gas targets. On top of that, electricity supply must be cost effective, even though a key part of government energy policy is the so-called capacity mechanism, which will put gas-powered plants on standby to fill gaps in solar and wind-powered electricity supply.

via Why the ‘dash for gas’ has got off to a false start | Business | The Observer.

Why the 'dash for gas' has got off to a false start

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