UK energy policy moves toward natural gas, away from coal and renewables

Amber Rudd
Source: WikiCommons

In a major shift, the UK has reordered its energy priorities putting energy security ahead of climate change for the first time in years. Amber Rudd, Secretary of State for Energy and Climate Change (pictured), made that clear in the speech she delivered at the Institution of Civil Engineers in London on Wednesday, when she said: “Energy security has to be the number-one priority.”

This new priority in the UK’s energy policy means that while tackling climate change is still high on the agenda – a fact reflected by Amber Rudd’s commitment to closing all country’s coal-fired power stations by 2025 – the fuel of choice for the future will be natural gas, rather than renewable energy.

Rudd cited UK progress toward development of an offshore wind industry but said: “It is still too expensive. So our approach will be different. We will not support offshore wind at any cost. Further support will be strictly conditional on the cost reductions we have seen already accelerating.”

Instead, she expressed a belief that nuclear energy and gas both are “central to our energy secure future,” providing that nuclear energy does not come with a hefty bill. “Green energy must be cheap energy,” she said.

In her speech she argued that policy of subsidising renewables has not brought expected results in a shift toward greener energy. “Perversely, even with the huge growth in renewables, our dependence on coal – the dirtiest fossil fuel – hasn’t been reduced. Indeed a higher proportion of our electricity came from coal in 2014 than in 1999. So despite intervention we still haven’t found the right balance,” Rudd said. “One of the greatest and most cost-effective contributions we can make to emission reductions in electricity is by replacing coal-fired power stations with gas.”

According to a report from the Parliamentary Office of Science and Technology (POST), the UK imported 45% of gas last year. It has also produced 2.6bcm of biogas last year and is expected to reach 7bcm annually by 2025. The report considered the likelihood of commercial production of shale gas in the UK “unlikely”, yet still recommended a shift to the use of natural gas as a way to meet the country’s emission targets.

The report said: “Climate change targets are likely to be a key driver of changes in gas use. Using gas can help to meet short and medium term targets where it replaces oil or coal. However, building or installing too many new gas-using units could create political, economic and behavioural barriers to reducing emissions in future decades when cuts in gas use will also be needed to meet carbon targets.”

The move toward natural gas for energy generation – favoured both by Amber Rudd and the POST – was welcomed by the industry body Oil & Gas UK, whose Chief Executive Deirdre Michie commented in a statement: “The Maximising Economic Recovery (MER) UK strategy will form the cornerstone of the tripartite approach being taken by the new Oil and Gas Authority, HM Treasury and the industry to extraction of the UK’s oil and gas resources.

“The Secretary of State for Energy stated that energy security has to be the number one priority and that gas will play a key role in powering our future economy. It makes sense therefore to make the most of the country’s own resources and the MER UK strategy, in tandem with the creation of the new Oil and Gas Authority, is designed to do just that. There are up to an estimated 20 billion barrels of oil and gas to be recovered from our offshore waters, around eight billion barrels of that is natural gas.

“In addition, the carbon footprint of UK production is somewhat lower than many imported sources. Therefore, the UK is not undermining or jeopardizing its carbon targets if we produce rather than import the gas this country needs.”

Fellow trade body UKOOG (United Kingdom Onshore Oil and Gas) – which represents the shale gas industry as well as the conventional onshore oil and gas sector – released a statement that it also welcomed the move.

The statement added: “In 2000 the UK produced enough to cover all our gas needs but just 15 years on we rely on imports for nearly half of our natural gas. In a further 15 years that figure could rise to 75 percent. We have a clear and pressing need to secure gas for 84 percent of our homes that use it for cooking and heating, the 40 percent of electricity that is produced from it and over 500,000 jobs that are sustained by using it to create everyday products we know and love.”

“UKOOG supports the creation of an energy mix that includes natural gas, nuclear and renewables. We now need to get on and appraise and develop the gas below our feet, in particular the huge resources of natural gas locked up in the shale rock underlying the UK.”

A wave of sharp criticism – perhaps unsurprisingly – came from the renewable energy sector and the environmentalists.

Niall Stuart, Chief Executive of Scottish Renewables, said: “It appears that the Secretary of State is bending over backwards to highlight the benefits of gas-fired and nuclear power, whilst overstating the challenges of increasing our renewable energy capacity.”

“It is right that we get coal off the system but there is no mention of gas already being the UK’s main source of carbon emissions, the cost of nuclear power being significantly more expensive than onshore wind and solar, nor the challenges of managing large and inflexible nuclear power plants.”

“With the promise of future support for gas, nuclear and offshore wind, it is totally unclear if there is any future for investment in onshore wind and solar, despite the fact that these are the cheapest forms of renewable power available,” continued Stuart. “Both have the potential to make a significant contribution to future climate change targets while keeping bills down for consumers, but we will only secure deployment if they too can bid in for the long term contracts for clean power available to other technologies.”

Meanwhile, Friends of the Earth’s senior energy campaigner Simon Bullock said in a statement emailed to ThinkProgress: “While it’s genuinely historic news that the UK will phase-out coal by 2025, this is tempered by government intentions for a huge new generation of gas-power stations, fuelled by fracking.”

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