Government Plans for Major Increase in New Gas Fired Generation

The Government has confirmed a continuing and growing role for gas fired electricity generation capacity for the coming decades with the publication of the ‘Gas Generation Strategy.’ Up to 26GW of new gas generating capacity could be needed by 2030 and perhaps as much as 37GW (equivalent to just over 40% of the UK’s current generating capacity) if the forthcoming fourth carbon budget is revised upwards, following advice from the Committee on Climate Change due in 2014.

The strategy includes some key measures aimed at providing ‘market certainty’ to investors in new gas fired generation capacity:

• Powers in the Energy Bill to establish a capacity market, delivering capacity in by winter 2018/19 through capacity auctions from 2014;
• Changes to the planning regime across Great Britain aimed at increasing flexibility and clarity for existing consents whilst also reducing the amount work needed during pre planning;
• Further measures encouraging gas storage to be published in Spring 2013;
• Establishment of an ‘Office for unconventional Gas and Oil’ as a single contact point for investors and to streamline regulatory functions; and
• The Treasury is also consulting on ‘an appropriate fiscal regime for shale exploration’ and on updating the strategic environmental assessment for onshore licensing.

The strategy also confirms the government’s aim to develop carbon capture and storage to a commercial level to help reduce carbon emissions from fossil fuelled generating stations.

For more information please visit the DECC website.

For further information, help or advice please contact Andrew Davison on 0191 211 7950 or email [email protected]