Cheap and cheerful: Gas will soon be our main source of electricity
Natural gas gets little mention in discussions of British energy policy. That is surprising, because natural gas accounted for 39 per cent of primary energy supply in 2009, slightly higher than oil and more than twice as much as coal. In the power generation sector, gas produced 46 per cent of the electricity generated in Britain. And on any reckoning, gas will continue to be a large and vital component of Britain's energy supply for many decades to come.
But why is gas politically invisible? Perhaps the most important reason is that the energy debate, such as it is, has been dictated for 20 years by green activists bent on ending our reliance on fossil fuels. The fact that natural gas is more efficient and produces less than half the CO2 of coal and oil just makes them angry. For green ideologues, gas is just another vile product of the evil global hydrocarbons industry, and as such its relative benefits should be ignored.
Recent British governments have failed to acknowledge the economic importance of gas. Energy policy has been calibrated to appease the environmentalists, their powerful allies in the media and a sentimental electorate. Yet the headlong dash for wind power — underwritten by taxes and subsidies that will force up consumer prices to uncomfortable levels as the total amount of wind capacity rises — will itself increase the need for gas-fired generation. Gas is the only fuel that has the scale and the flexibility to generate at very short notice to back up highly intermittent wind turbines.
Gas-fired power is also the only possible replacement for the coal-fired stations that will be retired in 2015 under an EU directive. And gas is going to fill the gap between the withdrawal of old nuclear power plants in the years up to 2020 and the still-doubtful replacements which are unlikely to come online in any numbers before 2025.
National Grid, whose job it is to transport power from generators to customers, forecasts that by 2017 gas-fired power stations will represent nearly half of Britain's installed generation capacity.
Some of the generation capacity forecast for 2017 may not be built, but it is clear that gas will be the dominant source of electricity in Britain towards the end of this decade, as well as continuing to provide about two-thirds of central heating and cooking needs. At the same time Britain's own gas production from the North Sea continues to decline and imports to rise. Should we be worried?
The alarm has been sounded by politicians of all stripes. Tony Blair used security of gas supply as the hook to hang his decision to back nuclear new-build. Charles Hendry and Greg Barker, the Conservative energy spokesmen, tried to sound at once green and patriotic, while demonstrating their ignorance of one of the Tories' economic triumphs of the '80s and '90s, namely the competitive gas and electricity markets that efficiently guarantee Britain's energy supply.
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