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Britain Scales Back Wind Power As Shale Revolution Shakes Green Energy Assumptions

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Tim Webb, The Times

Gas prices in Britain could halve after 2030 because of the global shale gas revolution, according to a report that is at odds with the latest government forecasts. The Government also appeared to scale back its offshore wind programme, which spooked the industry.

Surging shale gas production in the United States and China and lower oil prices mean that gas prices will fall from nearly 70p a therm today to 60p by the end of the decade and then rise gently, according to a report by Navigant.

The consultancy was commissioned by the Department of Energy and Climate Change (DECC) to study the impact that booming global unconventional gas production will have on UK prices over the next 20 years.

Its findings contrast with DECC forecasts, also published yesterday, in which prices will rise to 73½p over the same period. Under Navigant’s best-case scenario, in which Britain and other parts of Europe become leading shale gas producers after 2020, gas prices would fall to 50p by 2030 and to 35p soon thereafter.

Analysts said that the findings further undermine the Government’s economic justification for building expensive wind farms and nuclear reactors, which is based on an assumption that fossil fuel prices will keep rising so consumers will eventually save money. […]

The Government also appeared to scale back its offshore wind programme, which spooked the industry. Last month officials forecast that Britain’s capacity of 3.3 gigawatts could increase to between 12GW and 16GW by the end of the decade. But under one scenario published yesterday, only 9GW would be in operation by the end of 2030…

Maf Smith, deputy chief executive of RenewableUK, an energy trade association, warned: “The Government risks undermining confidence by scaling back on its ambitions. The scenarios set out today show that Government is still in mixed minds about the role of renewables.”

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