Wednesday, October 10, 2012

Gas power 'is undermining energy sector'

Businesses have urged the Government to set a target of slashing carbon emissions from the power sector by 2030 to stimulate investment that will drive growth.


Companies and investors have joined trade unions, environmental groups and industry bodies in warning George Osborne that support for gas power into the 2030s is undermining investment in Britain’s electricity infrastructure.

In an open letter to the Chancellor on the day that he addresses the Conservative Party conference, they demand a target written into legislation to decarbonise the power sector to unleash a necessary £110 billion investment in electricity supplies.

It is the latest twist in the battle over energy policy, ignited when Ed Davey, the Liberal Democrat Energy Secretary, saw off Tory calls for significant cuts to onshore wind farm subsidies — at the price of support for gas up to and beyond 2030.

The Government’s climate advisers have warned that support for future gas plants without technology to cut emissions is not compatible with climate change legislation, and is harming investment in low-carbon power such as renewables and nuclear.

Ed Miliband, the Labour leader, has backed a 2030 target for the power sector, and the Liberal Democrats support a target under secondary legislation.

In today’s letter, more than 50 businesses and groups warn that failure to act at sufficient scale and pace on climate change, energy security and commodity price volatility would mean Britain missing out on the opportunities of a global shift to low-carbon economies.

Businesses such as Asda, Aviva, British American Tobacco, EDF, Microsoft, Marks & Spencer, PepsiCo, Philips, Sky and the Co-operative have signed the letter.

It points to a report by the CBI, which estimates that while a third of UK growth in 2011-12 came from green businesses, policy uncertainty could lose the UK £400 million in exports in 2014-15.

“It is essential for Government to provide investors with the long-term confidence they need to transform our electricity market and make investments capable of driving wider economic growth,” the letter says.

Peter Young, chairman of the Aldersgate Group, which coordinated the move, said: “The message of this letter is loud and clear: we must put an end to any political uncertainty surrounding the UK’s energy future and start unleashing the billions of pounds of overdue investment which will deliver new growth for our economy.’’

Andy Atkins, executive director of Friends of the Earth, which backed the letter, said Mr Osborne’s support for gas power was looking increasingly isolated.

“The Chancellor’s dash for gas would send the economy and environment hurtling in the wrong direction,” he said.

telegraph.co.uk

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