Tomorrow we are told that Osborne in his Autumn Statement is going to ratify 30 new gas power sites and will give the green light to major shale gas exploration. The aim is to ensure that gas-fired power provides half of generation capacity by 2030. Some 26 gigawatts of new power capacity will be needed to replace nuclear and coal-fired plants closing down before 2020. But further, if the fourth carbon budget which sets out carbon emission targets is revised up, gas-fired power capacity could rise to 37GW. Such a target emphasises yet again, even more decisively than before, that the government is embarking on a new dash for gas and once again downgrading renewables. It also explains the highly unusual decision of the PM to reject the choice of the economist running the Committee on Climate Change (David Kennedy) who had been selected from the strongest field for many years to head up DECC.
This was hardly noticed at the time, but is highly significant. It is difficult to fault Kennedy’s pedigree. He came from the World Bank where he had worked on energy strategy. Previouslu he had been engaged on infrastructure investment projects at the EBRD (European Bank for Reconstruction and Development), and he holds a PhD in economics from LSE. He was recommended unanimously by DECC and its ministerial head Ed Davey, and his appointment was then regarded as a mere formality. Yet Cameron turned him down. Why? I have put down a PQ to find out, but there can be little doubt that it was because Cameron, veering towards the climate change deniers/downplayers on the Tory Right, wanted to make clear that the green economy was now off the agenda.
This would be to emphasise the priority of growth at all costs. Yet this is a total misunderstanding of the energy landscape. Germany, with its commitment to feed-in tariffs which were notoriously omitted from last week’s government Energy Statement, is strongly pursuing the green agenda, and despite much higher growth than the UK is projecting a 25% drop in electricity demand by 2050. Britain by contrast projects a rise of up to 66%! Why the huge difference? Germany decided to get serious on energy efficiency. The significance of that is that even a modest 10% reduction for the UK by 2030 would mean 5 fewer power stations need to be built, nearly 5 million tonnes of carbon dioxide could be saved, and no less than £4bn cut from energy bills.