Ed Davey (Liberal Democrat)

I am laying today before Parliament the Government’s gas generation strategy. Last week I set out in the annual energy statement the objectives of our overarching energy policy—to keep the lights on, to keep energy bills affordable and to cut greenhouse gas emissions. This needs to be delivered in a way that maximises benefits to the economy in terms of jobs, growth and investment. I also published details of our approach for reforming the electricity market which will be implemented through the Energy Bill.

The strategy reaffirms the Government’s expectation that gas will continue to play a major role in our electricity mix over the coming decades, alongside low-carbon technologies as we decarbonise our electricity system.

However, the need to decarbonise the UK’s electricity system will significantly impact the role of gas and we need to provide clarity to investors about the future role of gas to enable the new plant we need to get built.

The objective of the gas generation strategy published today is to reduce the uncertainty around gas generation for investors. Government recognise that support for other forms of generation could undermine certainty for investors in both low-carbon energy sources and gas. To this end, the Government are setting a sustainable and affordable cap on the levy control framework out to 2020. We are also reiterating that our approach to decarbonisation trajectories will continue to stay in step with other EU countries throughout the 2020s and consistent with a least-cost approach to our legally-binding 2050 decarbonisation objective and the fourth carbon budget.

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