Energy and Climate Change written question – answered at on 20 January 2011.
To ask the Secretary of State for Energy and Climate Change whether he has made an assessment of the potential effects of (a) shale gas and (b) coalbed methane exploration on the development of low-carbon energy.
The impact of unconventional gas production on the development of low-carbon energy in the UK will be principally driven by its impact on UK gas prices. The impact of further unconventional production on UK prices will depend on the extent and location of any production, whether production levels exceed or fall short of market expectations, and how it alters the costs of the marginal source of gas supply.
However, the prospects for unconventional gas are only one driver for gas prices. The future path of UK gas prices will also be driven by the global demand for gas, the price of other fuels, the tightness in different parts of the supply chain, the reliability of different supplies and the cost of producing conventional gas.
Under current market arrangements, if gas prices were to fall and if there were not an offsetting increase in carbon prices then this could result in less investment in low-carbon generation and greater investment in gas-fired generation. The opposite could result if gas prices were to rise.
Yes0 people think so
No0 people think not
Would you like to ask a question like this yourself? Use our Freedom of Information site.