The future of gas power: critical market and technology issues
|26 November 2012|
This briefing shows that investment in all forms of power generation will be held back until there is clarity on the future role of gas
It finds that, contrary to expectations, there is unlikely to be a dash for gas in the short term. Investors in both low carbon and gas power need further certainty over the role of gas power in the medium to long term to build a low carbon, secure electricity system.
Delay in setting an electricity sector carbon target will create uncertainty over the longer term electricity mix. There is a wish in government for gas to play a major role but it can only play a peaking role in a low carbon electricity system until carbon capture and storage technology becomes commercially viable.
The briefing outlines three key tests for government strategy on gas generation:
- Demonstrate consistency with carbon budgets by clarifying how new gas plant will be run.
- Provide greater certainty post-2020 to increase investor confidence.
- Provide good value to bill payers by ensuring other cheaper options are considered first.