MPs warn that UK rules could hamper renewables investment

Investment in renewable energy technology could suffer as a result of new government rules that favour gas-powered generation, MPs are warning.

Plans to speed up the planning process for major energy projects do not prioritise low-carbon generation over conventional capacity, according to a report from the House of Commons Energy and Climate Change Committee.

This could encourage a ‘dash for gas’ from investors, and the development of too much gas capacity could crowd out opportunities for renewable sources of energy, the report warns.

Committee chair Tim Yeo MP said: ‘If we want to keep the lights on and create an energy system fit for the future then new rules are needed to fast track energy projects through the UK’s notoriously glacial planning system.

‘If these new policy statements don’t put the cleanest forms of energy at the top of the agenda they will leave us dangerously dependent on fossil fuels.

‘The UK’s energy security and our prospects for creating a successful low-carbon economy depend on the government kick-starting a dash for low-carbon technology, not a new dash for gas.’

The Department for Energy and Climate Change (DECC) has said that £200bn of new investment in energy infrastructure is needed by 2020 to cope with rising demand and meet targets on renewable energy and climate change. 

The committee sees a continuing role of abated gas generation in order to provide baseload power, as well as unabated gas capacity for peak-time use.

But the report warns that too much gas could stop renewables becoming a substantial component of the UK’s energy mix.

The committee is also sceptical about the ability of the government to deliver its aims on nuclear power.

Ministers told the committee that the National Policy Statements should enable the development of 16GW of new nuclear plant by 2025. That is two new nuclear plants each year.

‘Hooking up this amount of new nuclear and other generation to the National Grid poses an unprecedented challenge,’ said Yeo.

‘Two plants a year is a very high target to reach. The NPSs lack any real framework for co-ordinating the process of setting and linking up the new power stations.’

Responding to the warning of a ‘dash for gas’, the Institution of Civil Engineers (ICE) director-general, Tom Foulkes, said: ‘Making investment in renewable energy sources less risky for potential investors is crucial if we are to ensure the UK has a secure and sustainable energy supply in future.

‘Government must clearly demonstrate its long-term commitment to low-carbon energy generation by setting an effective floor price for carbon and delivering on the principles outlined in the proposed Electricity Market Reform.

‘Only then will we be able to attract the hefty investment needed and avoid an ongoing reliance on fossil fuels.’

The term ‘dash for gas’ was originally used to describe the shift to gas-powered electricity generation by newly privatised UK power companies during the 1990s.