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UK to lift 2030 gas-fired electricity capacity forecast by 6GW

04 Dec 2012 17:44:50 | edem esgm

The UK's latest electricity capacity projection foresees 26GW of new natural gas-fired generation coming on line through to 2030, the Department of Energy and Climate Change (DECC) confirmed to ICIS on Tuesday.

The figure, to be included in Wednesday's long-awaited Gas Generation Strategy, has been revised upwards by 6GW since as recently as last month, when energy secretary Ed Davey said that he expected 20GW of new gas generation to be built over the period (see EDEM 8 October 2012).

Just 5GW of the 26GW total will represent an increase from today's installed capacity, with 21GW of gas-fired generation capacity scheduled to close by 2030, a DECC spokeswoman confirmed.

As things stand, National Grid's transmission entry capacity register figures show 33.4GW of gas-fired power generation capacity on line as of 3 December. This will give a 2030 installed capacity of some 38GW.

However, the figure needs to be interpreted with caution because not all plants will be available to generate even if booked on the register with some in a mothballed state.

The Treasury has had a major hand in the Gas Generation Strategy, which will be unveiled alongside its Autumn statement. The headline figure created a furore when projections of new gas capacity first emerged on Monday evening.

UK energy traders were sceptical of an increased role for gas generation. One London-based power trader voiced concern over the security of supply of gas in coming years. "Also, how is gas going to fit within a stack [of generation capacity] laden with renewables and new nuclear generation?" he asked.

Rift

DECC's latest projection differs from recent analysis by network operator National Grid in its Future Energy Scenarios.

The study's mid-range, or "going green" scenario, estimated 13GW of gas generation would be built between 2015 and 2025 to replace an estimated 7.5GW that is slated to come off line. It put installed capacity of gas and combined heat and power generation as high as 39GW by 2030 (see EDEM 27 September 2012).

The larger predicted role for gas comes in the wake of a rift between Conservative chancellor of the exchequer George Osborne, who has made public his desire to see renewable energy subsidies cut, and Liberal Democrat Davey, who heads DECC.

Davey then spoke of a "grand bargain" between the two coalition-government partners at the launch of the energy bill last week.

The renewable energy industry reacted "nervously" to the latest projections, which were leaked two days prior to the Gas Generation Strategy's release.

Renewable Energy Association chairman Martin Wright called for the government to ensure gas-fired generation would complement and not compete with the UK's target of generating 30% of consumed electricity from renewable sources by 2020. KB

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