Now Government Wants To Subsidise Gas-Fired Power Plants Too

  • Date: 30/11/12
  • Daily Mail

A dramatic ‘dash for gas’ strategy will be unveiled over the next ten days as the Government prepares the way to spend billions of pounds on gas-fired power plants.

Power giants are refusing to build new gas-fired stations, even though they have planning permission, because they argue they are not economical. These power plants cost between £500million and £800million each, but they can only be economical if run continuously.

However, they are largely needed to operate intermittently as a back-up to ‘inflexible’ nuclear stations, which tend to generate a steady output and cannot quickly increase production, and wind turbines, which do not operate when the wind drops, typically during cold snaps when their output is needed most.

To encourage utility firms to build the power stations, the Government will announce a new system that effectively provides a subsidy to run gas-fired power plants.

This inducement, which comes on top of the £7.6billion subsidy announced last week for nuclear and wind power, is expected to result in the construction of about 20 gas-fired power stations.

Most of the energy giants will not commit to building new capacity until they know the exact size of the likely subsidy. Inevitably, all these subsidies will be paid for by consumers through household bills, which are set to soar dramatically.

According to Mark Todd, director of the price comparison website energyhelpline.com, the Coalition’s green measures will increase bills by a third by 2020, with the typical dual-fuel gas and electricity bill, more than doubling from £1,200 to £2,500 a year over the same period.

Full story