Utility Week

UTILITY Week 22nd May 2015

Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government

Issue link: https://fhpublishing.uberflip.com/i/514326

Contents of this Issue

Navigation

Page 16 of 31

UTILITY WEEK | 22ND - 28TH MAY 2015 | 17 Operations & Assets sumers feel the pressure of increased energy prices. The price rises of recent years have put the energy sector centre stage before the public and politicians, something we are acutely aware of. It's up to us as networks to constantly demonstrate that we are deliver- ing good value for consumers' money. That said, a key issue remains in the lack of public transparency around the real cost of the different sources of energy and the lack of a clear energy strategy for the UK. The debate continues to lurch between focus on security of supply, affordability and car- bon reduction. We all recognise the drive to reduce car- bon, but this needs to be achieved through a balanced energy strategy – one that also rec- ognises the need for consumer affordability and UK industrial competitiveness. The strat- egy must also ensure a secure energy supply, even when the wind doesn't blow. The drive for carbon reduction clearly raises questions about the future of gas in the UK, given its fossil fuel status. But let's consider the broader facts. • Gas emits 50 per cent less carbon dioxide than coal – at a time when the use of coal has actually increased in the UK and is pro- jected to increase globally for some time to come. • With a "strike price" of about £50/MWh, gas remains significantly cheaper than most other forms of energy. For example, as the cost of sources such as wind is falling, they are still at £80 to £90/MWh for onshore and £120 to £150/MWh for offshore. Gas contin- ues to be an efficient source of fuel, a fact reinforced by the significant numbers of con- sumers that still regularly seek to convert to it from other fuel sources. • Shale gas has been a game changer in the US, where fuel now costs about a third as much as it does in the UK, giving their indus- try a competitive advantage. Geologists tell us there is a significant shale gas resource in the UK – and if we eventually get round to accessing it there is a ready-made and effec- tive way to transport it safely through the existing UK gas network. As we strive in the UK to achieve the challenging carbon reduction targets up to 2050, we must not overlook the contribution that gas can continue to make in the energy mix – by providing a low-cost and sustain- able contribution to our energy and climate change needs. A comprehensive report by independ- ent consultants Redpoint in 2011 said that the continued use of gas could realise sav- ings of up to £700 billion up to 2050, com- pared with scenarios in which gas is phased out of the energy mix. These numbers still hold true. This reflects a massive saving of £20,000 per household in the UK, and represents a significant contribution to easing consumer hardship and supporting industrial competi- tiveness over the period. All this said, the challenges of climate change and sustainability will demand changes in gas technology. At WWU we have embraced this reality with a strong and ambi- tious innovation strategy. With a seventh biomethane plant soon to be connected to our network, we're making some big achievements that will stand us in good stead over the next ten years. Graham Edwards is chief executive of Wales & West Utilities WWU has won several awards, including one of UW's own Utility Industry Achieve- ment Awards (left). The UK's existing gas infrastructure could be used to transport shale gas (below) Gas emits 50% less carbon than coal £700bn could be saved by using gas

Articles in this issue

Archives of this issue

view archives of Utility Week - UTILITY Week 22nd May 2015