Oil & Gas UK has published a new report which has highlighted the financial and ...

Oil & Gas UK has published a new report which has highlighted the financial and practical risks of the UK government’s current energy policy - noting that natural gas should be used as an energy source for the future to a much greater extent than is currently envisaged by the Department of Energy and Climate Change (DECC). The new report, Gas: at the centre of a low carbon future, which has been written by Pöyry Energy Consulting, notes that the UK’s target of sourcing 15% of energy from renewables has caused the government to overlook the potential for gas in its long-term energy projections - the knock-on effect of which is that investment in gas-fired power generation in the long term is not being encouraged. The report shows that the government’s current plans will cost residential, commercial and industrial consumers more unless gas forms a bigger part of the future energy mix. Pöyry’s Gareth Davies, report co-author, comments: ‘With the focus on short-term, stretching renewable targets, we risk losing sight of the longer-term objective of energy sector decarbonisation. The transformation of our energy system requires fundamental change in how we use and produce energy, but pushing too hard, too quickly, increases the risk to consumers of high prices and reduced security of supply. Gas can help reduce this risk.’ Current government expectations are based on a major expansion of electricity to heat homes and for use in transport, meaning there are many challenges in delivering this vision, the report notes. As Pöyry’s Richard Sarsfield-Hall, report co-author, explains: ‘Gas’ environmental credentials and existing infrastructure can deliver real carbon savings now, and help facilitate the integration of intermittent renewables. With the potential for added carbon capture and storage, and biomethane, gas can be a significant part of the long-term solution’. The report states that a greater use of gas in the future than is currently identified by the government will increase energy security and affordability, while allowing cuts in carbon dioxide emissions. ‘Therefore, we call upon DECC to elevate the role of gas in its projections for both the transition to a low carbon economy and the end-game, which will help provide the required certainty to promote investment,’ David Odling, Oil & Gas UK’s Energy Policy Manager, concludes.