UK Energy Policy in the Doldrums?

From the FT Energy Source, an excerpt from a new CBI report on UK energy policy in advance of a government report due out tomorrow:

The picture that emerges is unsettling. Faced with concerns over how quickly new nuclear will progress through the planning and licensing system, and the possibility that even coal plants that are compliant with existing EU environmental regulation may be forced to close early by the proposed Industrial Emissions Directive, generators have little choice but to prepare to build a second wave of gas-fired plants (ie in addition to the 8GW currently under construction) to keep the lights on before new nuclear and some CCS coal plants start to come onto the system in the 2020s. Wind will be built in quantity given the subsidies available, but probably not to the extent envisaged by the government to meet the EU-set Renewables Target.

The FT explains:

This, they say, will reduce carbon emissions as coal plants close and ‘keep the lights on’. But the CBI argues it will be unsustainable beyond the 2020s. Their primary concern is that a great deal of new gas capacity will be built: 8GW are already under way and their modelling suggests another 17GW will be built as existing plants age and coal plants look more likely to be shut down early. The CBI says this will make the UK vulnerable to expensive and insecure international gas markets, and will pose a problem for storage. (Part of the expense is also because the UK has more power plants up for retirement than its neighbours.) The CBI also says this gas-fired boom would make 2020 targets reachable, but not 2030 levels, as carbon reduction gains will flatten out in the 2020s once the gas power stations are up and running.

Wind, the CBI says, will contribute to the increase in gas-fired plants as they will be needed to supplement wind’s intermittency. The CBI also argues this will also contribute to price volatility, while offshore wind, they say, requires too much expensive infrastructure, including the cost of connecting to the grid.

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