The Energy and Climate Change committee heard from witnesses that the gas strategy does not yet make clear what generation mix government is aiming for.
David Kennedy, chief executive of the Climate Change Committee, said the gas strategy was “unhelpful” because it questions the carbon budgets. It tells investors “we don’t really know where we are going with our energy system”, he said.
Kennedy said unless clarity is created in the gas strategy by outlining a decarbonisation target, the UK could face a hiatus in investment and “problems in the future”.
Rachel Cary, senior policy advisor at think-tank Green Alliance told MPs the gas strategy “sends out mixed signals to investors – and not just low carbon investors”. It does not clarify how much they will make from generation or how much they are likely to earn from providing capacity, she said.
Keith MacLean, policy and research director at SSE, said the gas strategy “doesn’t take us much further forward” because it fails to make clear whether gas plant will be run for base load demand, or peak load only. He added: “Real progress could be made with the introduction of the capacity mechanism in the Energy Bill.”
MacLean said this was “really essential” because it would give investors a framework on how they would make a return.
David Cox, managing director of the Gas Forum, called the Gas Strategy an “essential first step” but added that some detail is missing and it is “needed quickly if we’re going to get the investment we need”.