Page 6 So we are proposing a phased approach, and one that recognises gas generation will continue to play a critical role
We are flat broke and cant afford to waste massive amounts of setup capital with slow payback and moderatre IRRs that are provided by Renewables. Give us gas, gas, and more gas. BUT!!!
Page 6 ...looking forward to strategies on energy security and gas to be published in the Autumn.
That is, Europe is bent over a barrell choosing either Russia or the Middle East to supplement their dwinlding gas reserves. This is all money which turns to vapour as it leaves their country to go to another that supports their jobs, industry, terms of trade for countries. They don't have democracies and opportunities for the UK and Europe to compete there are limited. A very bad outcome which highlights how important indigenous gas is.
Page 12 an Emissions Performance Standard (EPS) set at 450g CO2/kWh to reinforce the requirement that no new coal-fired power stations are built without CCS, but also to ensure necessary short-term investment in gas can take place;
In summary, we have created bias artificial conditions that result in ....GAS IN. COAL OUT.
Page 17 low carbon plant such as nuclear or offshore wind typically has very high upfront capital costs and very low ongoing costs, compared with unabated7 fossil fuel plant such as gas;.
That is, GAS = GOOD. NUKE+SOLAR=BAD.
Page 18 So, without reform to the electricity market we would increasingly rely on one type of generation, gas, which would leave us with less diversity, and with energy security and affordability implications as we would be more exposed to price volatility as well, as being less able to meet our climate change objectives.
Wait, gas doesnt sound so great now. Oh oh? All those imports will kill our economy as we become even more dependent and susceptible to the Middle East and Euro East.
but wait there's more...
Page 18 28. Gas will nonetheless continue to play an important role in the electricity sector; providing vital flexibility to support increasing amounts of low carbon generation; continuing to meet a significant proportion of demand; and maintaining security of supply. Gas can provide reliable and flexible generation, helping to balance the system, and in the longer term providing flexible resource either operating as back up to meet some peak demand or with a wider operating pattern once fitted with CCS. DECC will publish a strategy on the role of gas in the electricity market in autumn 2012.
It seems that they were just highlighting how vulnerable they see themselves. There were those important words again = SECURITY. RELIABLE. FLEXIBLE. LOW CARBON.
I have a hunch I know where they are going to be looking for gas guys....looking forward to the Northern Autumn...and more importantly in the mean time, the response to the public comments on shale gas drilling that are due to close in about a week.
SF
DTE Price at posting:
17.0¢ Sentiment: Buy Disclosure: Held
