Whitehall is divided but the Chancellor sees a future for the fossil fuel. George Osborne is determined the lights won’t go out.
The Chancellor has intervened to influence one of the most pressing energy policy issues because he was unhappy that the Energy Department has been ambivalent and too narrowly focused in its efforts to fill the potential gap in electricity generation when the old coal and nuclear plants are phased out.
He is concerned that Ed Davey, Energy Secretary, and his predecessor Chris Huhne, placed too much emphasis on the green dimension of renewable energy and a revival of nuclear power to provide the replacement capacity needed to meet any shortfall and ignored the case for back-up in the event of construction delays.
He believes another dash for gas will provide the insurance needed to avoid the risk of blackouts because of the uncertainties surrounding the renaissance of nuclear power and the problems involved in linking wind farms into a more complex electricity distribution system.
Gas, according to one expert in the field, is often presented as a “necessary evil” to smooth the transition to a low-carbon energy strategy, filling the short-term generation gap, providing back-up when wind farms are idle and essential in the heat market where it accounts for 80pc of business.
Evil or not, gas is back in the generating line-up and security of supply equation after a bruising Whitehall battle between Mr Osborne and Mr Davey, but there are still differences about whether its contribution will be short or long term. A strategy for gas is promised for the autumn with Mr Osborne arguing it will have a strong role well beyond 2030 and Mr Davey wanting to bring down the curtain on the fossil-fuel age.
