Renew On Line (UK) 26

Extracts from the May-June 2000 edition of Renew
These extracts only represent about 25% of it

13. Levy favours Gas?

When Labour took power, it slapped a moritorium on new Combined Cycle Gas Turbines, to slow the ‘dash for gas’ and avoid the UK becoming totally reliant on one fuel source- which was sensible, but could also be read as a defensive move to protect coal. Burning gas produces around 40% less carbon dioxide than burning coal per kWh of electricity generated, so the penalty Labour paid for its moritorium policy was an increase in emissions. Their solution- the Climate Change Levy, which will put about 8% extra on the price of electricity for most companies, stimulating them to either reduce consumption or seek renewables options (which are exempt from the levy).

That’s fine as far as it goes, but there is also a risk that companies will break out of this bind, and simply seek the cheapest source of power- electricity from gas turbines- to offset the cost of the levy. Those hostile to the Climate Change levy have argued that, in fact, if the moritorium on gas had not been imposed, then the carbon savings that the CCL is expected to produce would have been achieved with much less cost and with less bureaucracy. But of course, then there wouldn’t have been any incentive to use renewables...just more and more gas. See FT 23/.2/00