Party conference developments The key energy policy developments from the party conferences, to date, are:
- At the Labour conference Ed Milliband used his leader’s speech to announce that a future Labour government would cap gas and electricity bills for 20 months. While the policy has proved popular initially they are concerns about its impact on the costs prior to the next election and the ability of energy companies to upgrade an ageing infrastructure.
- The Liberal Democrats supported a motion to back nuclear power, a policy u-turn, on the grounds it will help tackle climate change. The party also agreed to accept fracking if it takes place under stricter regulation.
IPCC Fifth Report The UNs Intergovernmental Panel on Climate Change (IPCC) has published its latest assessment of climate change science. The report states that scientists are 95% certain that humans are the “dominant cause” of global warming and that a pause in warming over the past 15 years is too short to reflect long-term trends. The assessment increased the likelihood that a legally binding global agreement could be reached in 2015. As the UK is a global leader in addressing climate change a comprehensive agreement would reduce the risk of UK based companies relocating to countries with less strict environmental targets.
Skill shortages behind oil and gas wage increases Average wages in the UK’s oil and gas sector are set to rise by 15 per cent this year – breaking through the $100,000-a-year ceiling – as record levels of investment in extracting Britain’s reserves create shortages of trained staff in the industry. Data compiled by industry recruitment site Oilandgaspeople.com reinforce previous analysis of employment trends in the industry.
Government rules out new subsidy for gas storage The government has decided against intervening in the market to encourage new gas storage facilities. They said the UK energy market functioned well and attracts gas from a range of sources. Michael Fallon, business minister, said the decision would save consumers up to £750m over 10 years. But the decision was criticised by many who claim that lack of gas storage is undermining UK’s energy security. Since the announcement Centrica has cancelled plans to build two storage facilities.
UK shale gas development will not be at expense of climate change targets In a speech this month the Secretary of State for Energy and Climate Change, Edward Davey has said that if shale gas could be developed in an economically viable and environmentally friendly way, it would benefit the UK by increasing energy security. He was responding to the findings of a new report which estimates that the carbon footprint of UK produced shale gas would likely be significantly less than coal and also lower than imported Liquefied Natural Gas (LNG).
Severn Barrage case unproven according to government In a response to a House of Commons committee report the government has said that the plans for a £25bn barrage in the Severn Estuary are not viable. Backers of the scheme argue the tidal barrage could generate 5% of the UK’s electricity. Last summer the Commons’ Energy and Committee report found that that the backers “have yet to provide robust evidence of the viability of the project”. It is very unlikely the proposal in its current form will succeed.
Upcoming developments
- Energy Bill to complete its Parliamentary stages and become an Act of Parliament
- Offshore wind industrial strategy
- Draft nuclear strike price to be published
- Oil & gas review interim conclusions will be published in the autumn
- A final version of the EMR delivery plan will be published in December.
For further information contact Tom Nolan at 020 7654 5824 or [email protected]
