by Roger Milne
New gas-fired generation fitted with carbon capture and storage (CCS) would provide power at a similar cost to onshore wind, based on 2012 gas prices, and at between 50 and 60 per cent of the cost of electricity from offshore wind.
That’s the assessment of author Howard Rogers in an analysis for the Oxford Institute for Energy Studies, using figures compiled for the Department of Energy and Climate Change.
UK electricity consumers would benefit from less offshore wind and more gas with CCS, argued Rogers. For wind projects that do proceed, he said, gas with CCS would provide a low-carbon source of balancing generation at lower cost than coal with CCS. He noted that CCS had yet to be proven at a commercial scale on any power plant, however.
Meanwhile, the Committee on Climate Change ratcheted up pressure on the government to take a tougher stance on “unabated gas” (plant without CCS) after 2030.
The committee said: “Extensive use of unabated gas-fired capacity in 2030 and beyond would be incompatible with meeting legislated carbon budgets.”
In a letter to energy secretary Ed Davey, the committee urged a 2030 carbon intensity target of around 50 grammes of CO2 per kilowatt hour in secondary legislation, with a reference to this in the next draft of the Energy Bill.
Exchange investment shows confidence in EU gas
The UK gas industry was buoyed this week when the Intercontinental Exchange (ICE) moved into European gas trading.
ICE bought a majority stake in APX-ENDEX’s derivatives and spot gas business, which operates in the UK, Belgium and the Netherlands. ICE said gas had a “strategic role in Europe” and that it “facilitates the development of a low-carbon economy”. David Cox, managing director of UK trade association the Gas Forum, said the ICE statement “could have been written by ourselves”.
This article first appeared in Utility Week’s print edition of 21st September 2012.
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