The unexpected departure last week of the head Civil servant in DECC, Moira Wallace, shows the gas industry pushing for dominance of UK energy sector.
Ostensibly over renewable energy subsidies, Wallace’s resignation illustrates a behind-the-scenes battle within government with the Chancellor, George Osbourne, firmly backing gas. In a recent letter to energy secretary Ed Davey he demands “a statement which gives a clear, strong signal that we regard unabated gas as able to play a core part of our electricity generation.”
Davey, on the other hand, is reticent. The Financial Times reports that he is holding back on issuing new shale gas licences in Britain, amid local community concerns about the “fracking” process.
The chancellor is also wedded to the idea of building ten new gas fired power stations: gas advocates maintain gas is cleaner than coal (fracked gas isn’t) and a is a ‘bridge to renewables’ (read here for why renewables and gas are in fact diametrically opposed).
The crux of the argument centres around cost. Renewable energy prices are falling so fast (the price of installed solar in the UK has fallen by 60% in the last six months) that within the next few years it’s possible that renewables will become cheaper than fossil fuel equivalents.
This unexpected and fast-growing competitor directly threatens the new pageant of fossil fuel riches. The rapid roll out of renewables worldwide
(solar grew by 140% in 2010) has the gas industry aghast.
The debate splits along lib/dem vs tory lines, but the gas industry has many supporters inside government. See here for the vested interests involved.
Moira Wallace was at the heart of this struggle. With Treasury and the PM pushing for new gas, and deputy PM and Secretary of State pushing for more renewables, the civil servant was caught in the crossfire.
Her departure represents a great success for the anti-fracking movement. It demonstrates that the opposition – anti-frackers and those who are pro-renewables – is gaining power.
It also reveals they have powerful enemies.