Saturday, November 20, 2010

Britain: Without government intervention, natural gas would be too cheap

Bloomberg, 17 November 2010

Britain’s electricity market, “left untouched” by government regulations, would rely too much on gas and neglect other fuels needed to limit emissions and price volatility, the minister in charge of energy said today.

The U.K. government said it will set out steps later this year, such as guaranteeing electricity capacity, establishing a minimum cost of emitting carbon-dioxide and obliging energy suppliers to source low-carbon power such as wind and nuclear, to help attract investment.

“The current market framework is not fit to deliver the investment we need,” Chris Huhne, U.K. secretary of state for energy and climate change, said today in published remarks from a speech later today in London to the Confederation of British Industry. “Left untouched, the electricity market would allow a new dash for gas, increasing our dependence on a single fuel, and exposing us to volatile prices.”

Britain committed to cutting its CO2 emissions by 80 percent by 2050 compared with 1990 levels. The country needs to ensure sufficient energy supplies as it prepares to shut as much as 30 percent of its aging nuclear and fossil-fueled power capacity within the next decade. Power consumption may double by 2050 as the nation plans to encourage electric-powered cars.

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