The UK government has finally released its long overdue energy policy, and it seems that Chancellor George Osborne won.
The problems that were facing the coalition decision makers in regards to setting the new energy bill were three fold:
1. Sufficient power must be available to meet demand.
2. Energy bills must not increase too much.
3. Carbon Emissions cannot increase in order to stick to pre-set targets, in fact they need to fall.
Meeting all three has not been an easy task, and it is made harder by two decades of under-investment in the nation’s energy infrastructure.
To start with the three factors must be prioritised. The lights must stay on, that is obvious; and by law the carbon emissions must begin to decrease. That just leaves cost as the only option that could show a bit of give.
Unfortunately that bit of give means higher bills for consumers; by how much is currently unknown.
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Chancellor George Osborne seems to have outmuscled Energy Minister Ed Davey and the focus of the energy bill will be on his ‘dash for gas’ and the hope of a shale gas revolution in the UK, which supporters assure us will cause natural gas prices to plummet.
The problem is that no one else outside of the fracking industry thinks that this is likely; a shale boom is just not on the cards for the UK.
The alternative, which will now only play a small part in our energy future as most of the money is going into the dash for gas, is for a diverse range of energy investments, into natural gas, renewable energy, and nuclear power. By choosing a dash for gas path we have started to closethe door on the wind energy sector, which could have provided relatively cheap, clean energy.
The lack of backing for renewable energy means that the UK’s green sector, despite being one of the few to actually be constantly growing during the economic troubles, will also start to fall into decline as private investors and jobs move abroad.
By. Joao Peixe of Oilprice.com