A little dishonesty on future electricity prices: the new proposals for reform of the power

http://www.carboncommentary.com/2011/01/05/1747

(….)

‘The International Energy Agency has estimated the scale of unconventional gas resources and the range of costs of production. These suggest that the gas price of 76p per therm in 2030 under the central fossil price scenario is towards the high end of the range of supply costs (actually, it is above all but the prospective costs of some Artic gas sources) while the DECC’s lowest price of 35p/therm and the current price of 40-50p per therm are closer to the middle of the range’ (p265).

The unfortunate  truth is that if the generating companies really think that gas is going to cost 35p a therm in 2030, they will still want to invest in CCGT and not wind or even nuclear. No-one is very comfortable with this fact but the decarbonisation of electricity generation will not easily take place while generating assets remain privately held and utilities are completely free to continue to invest in fossil fuel power stations.

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