The first dash for gas, following liberalisation of the UK electricity market in 1990, was clearly in the UK’s national interest, because it significantly reduced carbon emissions and electricity prices. This briefing shows that a second dash for gas would not be in the UK’s long-term interest as it will raise the cost of meeting the nation’s carbon budgets.
Gas will continue to have an important role as a flexible fuel in the transition to a low carbon economy. However, because the UK has already cut its emissions by switching from coal to gas, a second dash for gas could prevent us from meeting our carbon budgets or significantly increase the cost of meeting them.
Relying on unabated gas which is cheap to build now doesn’t lead to lower cost decarbonisation; it will simply load the cost of decarbonisation into the 2020s. It could also deter investment in technologies such as offshore wind and Carbon Capture and Storage (CCS), technologies in which the UK has a competitive advantage.
Our conclusion is that the government cannot both govern for the long-term and allow a second dash for gas. It needs to begin to manage the gas generation market, both through its consenting decisions, support for CCS demonstration, and reform of the electricity market.