The Committee on Climate Change’s attack on government gas policy – the context
The Committee on Climate Change (CCC) – the government’s advisory body on climate targets – has today released a strongly worded letter criticising the government’s “apparently ambivalent position” and “mixed messages” on energy policy. Specifically, the CCC expresses “great concern” that the proposed expansion of gas-fired power is incompatible with the UK’s carbon targets.
The open letter from the members of the Committee on Climate Change (CCC) is pretty forthright. It begins:
“We are writing to express the great concern of the Committee on Climate Change about the recent Government statement “that it sees gas as continuing to play an important role in the energy mix well into and beyond 2030…[not] restricted to providing back up to renewables”.
In July, it became clear that there was a major row going on behind the scenes in government over energy policy – with George Osborne and the Treasury pushing for the UK to become a hub for gas investors and the Lib Dems resisting, on the basis that it will threaten our climate change targets.
The government then announced that it sees gas “continuing to play an important part in the energy mix well into and beyond 2030, while meeting our carbon budgets.”
There could well be a contradiction between a significant expansion of gas power and the government’s plans for reducing carbon emissions – an issue we raised with Ed Davey at the press conference in July. Davey told us that there was no problem, and that we should go and do our homework, referring to a piece of government modelling that he suggested would solve the puzzle. Unfortunately, it turned out that the government hasn’t made the modelling public, and isn’t planning to.
The CCC clearly isn’t convinced about the government’s plans, writing:
“Extensive use of unabated gas-fired capacity (i.e. without carbon capture and storage technology (CCS)) in 2030 and beyond would be incompatible with meeting legislated carbon budgets…Unabated gas-fired generation could therefore not form the basis for Government policy, given the need under the Climate Change Act to set policies to meet carbon budgets and the 2050 target.”
The letter – which is worth reading in full – is followed by an Appendix detailing the modelling which underpins the CCC’s view that “deep cuts in power sector emissions will be required to meet the 2050 [greenhouse gas emissions] target”. It adds:
“Without significant cuts, power sector emissions would account for almost all of the allowed emissions under the 2050 target…”
Gas – cheap or expensive?
The Appendix to the letter also deconstructs the argument that gas power is needed because it is cheap, and renewably generated power is expensive. According to the CCC, by the mid 2020s
“…use of unabated gas-fired generation rather than cost- effective low-carbon generation would significantly increase system costs â?¦ Even in an extremely unlikely case where the gas price in the EU falls to the level in the US â?¦ there is negligible benefit switching from cost-effective low-carbon generation to unabated gas-fired generation”.
And they illustrate this with the following figure, showing the predicted cost saving from expanding low-carbon technologies rather than gas:
Image - Screen Shot 2012-09-13 At 12.43.07 (note)
Mixed messages and the 2030 target
The Committee on Climate Change has expressed its view on this before, but perhaps rather less firmly. In today’s letter, it makes a series of clear statements about the impact on investment in low-carbon technology of “…the apparently ambivalent position of the Government” about what kind of energy system it wants to build. It argues:
“As a result, the cases for low-carbon business development, capital allocation, innovation and supply chain investment are undermined, damaging prospects for required low-carbon investments. This has been made clear to us in our extensive discussions with the energy and supply chain companies â?¦”
The CCC’S recommended solution which they have been arguing for since 2008 is that government should set:
“…a clear carbon objective â?¦ to reduce carbon intensity of power generation to around 50 gCO2 / kWh by 2030 â?¦ with a reference to this in the next draft of the Energy Bill.”
This would roughly equate to decarbonising the power sector, and Osborne is strongly opposed to setting such a target.
DECC’s response – and the politics
It’s likely that this has set the stage for a political battle which will play out this Autumn as the Energy Bill is debated. The Lib Dems are – rightly or wrongly – seen as the defenders of a 2030 carbon intensity target. But as the IPPR’s Will Straw observes on the website Left Foot Forward, Davey’s recent defence of the bill is silent on the government’s plans for the expansion of gas-fired power stations and what they mean for the UK’s greenhouse gas emissions.
DECC has responded to the CCC in a statement, saying “We are currently considering a 2030 electricity decarbonisation target” and “our existing plans are consistent with significant decarbonisation of the power sector” and “We are absolutely committed to meeting our statutory carbon budgets.”
It also says:
“After 2030 we expect that gas will only be used as back up, or fitted with Carbon Capture and Storage technology…”
The question is – if more gas is built – whether CCS will swoop in and save the day, or whether gas without CCS will form a major part of our energy system after 2030, which is what a lot of informed opinion seems to think is going to happen.
The website BusinessGreen argues that the CCC letter is a “major blow” to George Osborne’s plans with “the potential to spark a major political row between the Lib Dems and Osborne”. It remains to be seen whether this happens – but the CCC’s statement makes it pretty clear what it is that the opposing camps in the coalition government are likely to be fighting over.