A “dash for gas” would lock the UK into a high-carbon energy system that would leave it vulnerable to rising gas prices, an influential group of MPs has warned.
Only days before publication of the long-awaited and increasingly controversial Energy Bill, the Environmental Audit Committee has made a last minute appeal to the government to restore investor confidence in UK energy policy by setting a clear target for decarbonising electricity generation.
There have been growing concerns that the Treasury is pushing for a dilution of renewable energy targets in the bill, with the Chancellor George Osborne said to favour more gas-fired power stations to meet demand in the medium term.
But the committee said that a “Treasury-led ‘dash for gas’ could make the UK’s legally binding carbon reduction targets “unachievable” and the country exposed to future gas price increases.
A report by the committee scoping possible environment measures in the Chancellor’s forthcoming Autumn Statement was critical of the “mixed messages” the government is giving to investors on energy policy.
The committee was critical of the Chancellor’s reported reference to environmentalists as the “green Taliban”, and said that the Chancellor should “reflect” on his comments that present the “environment in opposition to the economy”. “They are wrong and counterproductive,” the committee said, adding that the Autumn Statement was an opportunity for the Treasury to underline its support for the green economy.
"The Autumn Statement sets the course of economic policy for the foreseeable future. The Treasury must end the uncertainty on energy policy and give investors and businesses the confidence to seize the enormous opportunities presented by new clean technologies,” said committee chair Joan Walley.
“A second 'dash for gas' could lock the UK into a high-carbon energy system that leaves us vulnerable to rising gas prices. The Government needs to reassure investors by setting a clear target in the Energy Bill to clean up the power sector by 2030."
The committee’s warnings were echoed by environmental group WWF-UK, which called on Prime Minister David Cameron to “take control” of “elements” within the Conservative Party who are “undermining investor confidence” in the UK.
The organisation singled out Osborne and Energy Minister John Hayes for “significantly” damaging confidence in the UK’s renewable energy industry.
It said Cameron now needed to “unequivocally” demonstrate his leadership on climate change and energy issues.
David Nussbaum, Chief Executive of WWF-UK, said: “On becoming Prime Minister, Mr Cameron suggested that his would be the ‘greenest government ever’. But since 2010, he seems to have lost his voice. There is currently a complete breakdown in government energy and climate change policy, sending mixed signals to investors and undermining job creation. David Cameron’s continued silence would be a betrayal not just of the Prime Minister's election promises, but of the UK national interest.”