Gas and nuclear are key to greener and more secure energy future, says business

Shale gas signThe Institute of Directors has welcomed the Government’s new energy policy and commitment to close coal-fired power stations by 2025, and replace them with cleaner sources of energy, including gas-fired plants and the first new nuclear power stations.

Dan Lewis, Senior Energy Adviser at the IoD, said: “We welcome the Energy Secretary’s plan to strike a balance between clean, cheap and reliable sources of electricity. Replacing coal with gas reduces carbon emissions at a reasonable cost to consumers and businesses.

“The first dash for gas in the 90s was successful because we were able to tap into our own gas from the North Sea. In this second dash for gas, we must use our shale as much as possible, or miss out on additional jobs, taxes and regional growth opportunities.

“Ensuring homes and businesses have a dependable supply of power is one of government’s most fundamental responsibilities and IoD members say energy security should be the most important part of the ‘trilemma.’

 “We have already seen an energy shortage scare this year, and the supply margin set to be the tightest it has been in a decade, at just 1.2%. Incredibly, big energy users have become used to requests from the National Grid to wind down production at peak times. This is expensive, burdensome and embarrassing.

“Renewables like wind and solar play a major role in our energy mix, but they need the right weather to work, so can be unreliable when things get tight. Subsidies have helped to stimulate the renewables industry, so that we now have large amounts of wind and solar power up and running. The government is now right to look at bringing subsidies down.

 “Creating reliable domestic sources of energy is an imperative. The UK’s first new nuclear plant in a generation, being built at Hinkley, must be the first of a fleet, with the government focussing on making future nuclear plants as cost effective as possible.

“Gas and nuclear are both safe, cleaner forms of energy which we can produce at home. Boosting their share in our energy mix is a crucial step towards a greener and more secure energy future.”

For the CBI, Rhian Kelly, Environment Director, said: “With recent changes in energy policy, it’s vital the Government gives investors clarity on the direction of travel. The Secretary of State’s announcement is an encouraging sign that the Government is looking at ways to bolster our long-term energy future.

“As we move away from relying on coal for our energy supply, it’s important the right signals are in place for investors to build new gas-fired power stations – at present, they are hard to find.

“A smooth transition from coal to gas is critical, so we must ensure we have new capacity before we take coal out of the energy mix. Getting this right should deliver a successful energy policy that works for consumers, businesses and investors.” 

Meanwhile, the UK’s onshore oil and gas industry (UKOOG) welcomed the reiteration of government policy towards onshore oil and gas.

A spokesman said: “In 2000, the UK produced enough to cover all our gas needs, but just 15 years on we rely on imports for nearly half of our natural gas. In a further 15 years that figure could rise to 75%.

“We have a clear and pressing need to secure gas for 84% of our homes that use it for cooking and heating, the 40% of electricity that is produced from it and over 500,000 jobs that are sustained by using it to create everyday products we know and love.

“We support the creation of an energy mix that includes natural gas, nuclear and renewables. We now need to get on and appraise and develop the gas below our feet, in particular the huge resources of natural gas locked up in the shale rock underlying the UK.

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