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UK Government Autumn Statement gives boost to gas

05 December 2012

The Autumn Statement to parliament on December 5 confirmed reports that the government is to expand the role of gas in the country’s energy mix. The statement forecast new capacity of up to 26 gigawatts (GW) of electricity by 2030, a net increase of 5GW.

Despite the Government setting up an Office for Unconventional Gas and Oil, there is as yet no indication when fracking might resume in the UK
Despite the Government setting up an Office for Unconventional Gas and Oil, there is as yet no indication when fracking might resume in the UK

In a statement announcing the government's new gas generation strategy, Energy Minister Ed Davey said: "Gas will provide a cleaner source of energy than coal, and will ensure we can keep the lights on as increasing amounts of wind and nuclear come online through the 2020s."

Mr Davey said the policy was "consistent with significantly reducing emissions from the power sector in order to meet Carbon Budgets".

Gas accounted for about 40% of UK electricity production in 2011; the new capacity could see that figure rise to 50%.

The government says it hopes to attract investment in new gas infrastructure by:
*introducing a Capacity Market, allowing for capacity auctions from 2014 to ensure energy supply at times of peak demand
*simplifying the planning regime
*stepping in if necessary to improve liquidity and market competition
*encouraging new gas storage capacity
*establishing an Office for Unconventional Gas and Oil
*potentially introducing new tax incentives for shale gas exploration
*supporting the development and commercialisation of carbon capture and storage technology

But there was still no announcement on whether drilling for shale gas would be allowed to continue, despite the announcements on potential tax incentives for the fledgling industry. A decision on whether or not to proceed with fracking will take place after further consultations, according to DECC.

In the US, shale gas discoveries have bought the country close to energy independence, but the side effects have caused complaints from affected locals.


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