London, 8 October (Argus) — The UK government should set a specific target for limiting the greenhouse gas (GHG) intensity of the power sector by 2030 to help resolve the uncertainty surrounding the UK's low-carbon growth prospects, according to a coalition of some of the largest companies in the UK.

“It is essential for the government to provide investors with the long-term confidence they need to transform our electricity market and make investments capable of driving wider economic growth,” the companies said in a letter sent to the UK's Conservative finance minister George Osborne. “Failure to act at sufficient scale and pace will… cause us to miss out on the huge commercial opportunities associated with the global shift to a low carbon, resource efficient economy,” they warned.

The publication of the letter has been timed to coincide with a speech made by Osborne to the Conservative party conference today. Signatories include EdF, Microsoft, Cisco, Philips, Aviva, BT and PepsiCo, while the Institute of Civil Engineers, the UK Green Building Council and Friends of the Earth are also among the non-corporate signatories to the letter.

“The message of this letter is loud and clear — we must put an end to any political uncertainty surrounding the UK's energy future,” says Peter Young, chairman of the Aldersgate Group, a sustainable business alliance that helped co-ordinate the lobbying effort. Young wants the Conservative conference to back a specific target for decarbonising the UK power sector, following the lead of this year's Labour and Liberal Democrat party conferences.

The signatories warn that the UK government's support for the increased use of unabated natural gas in the power sector beyond 2030 is risking its supposed commitment to a low-carbon economy. Osborne is understood to be a keen supporter of natural gas, even if it comes at the expense of the UK's GHG cutting efforts. Osborne in his conference speech chose to stress the potential of shale gas, citing consultations on a “generous” new tax regime that is meant to stimulate investment.

The Committee on Climate Change, the UK's government's independent climate advisor, last month publically warned energy and climate change secretary of state Ed Davey that the extensive use of gas-fired power capacity without carbon capture and storage (CCS) will place GHG reduction goals in jeopardy. The committee is in favour of enacting a specific target to limit the carbon intensity of the UK power sector to 50g/kWh of CO2 by 2030. Davey responded by saying that the government is still considering whether to set a target. Beyond 2030, natural gas will increasingly be used in power generation only as “back-up” or in conjunction with CCS, he insisted.

Send comments to feedback@argusmedia.com
fk/jbc 3.1

If you would like to review other ArgusMedia.com content options, request more information about Argus' energy news, data and analysis services.

Copyright © 2012 Argus Media Ltd - www.ArgusMedia.com - All rights reserved.