U.K. Seen Able to Cut 75% of Power Market Climate Impact by 2030

  • Emissions can be cut to below 100 grams per kilowatt-hour
  • Committee on Climate Change advises government on carbon cuts

The U.K. can cut three quarters of the carbon emissions it’s producing from making electricity without driving up bills too much by deploying more clean-energy technologies, the government’s climate change adviser said.

Investments that are planned in the power industry in the next five years already are sufficient to reduce the so-called carbon intensity of electricity to 200-250 grams of carbon dioxide per kilowatt-hour, from 450 grams today, the Committee on Climate Change said Thursday in an e-mailed report. Emissions below 100 grams are “an appropriate aim for 2030,” the committee said.

The findings are important because they’ll inform the committee’s advice next month to the government on its fifth carbon budget -- an absolute limit on Britain’s CO2 output for the five years from 2028 through 2032. The government isn’t obliged to follow that advice, but if it fails to do so, it legally required to explain why. Britain has already committed to cut its emissions in half from 1990 levels during its fourth carbon budget, running from 2023 through 2027. It’s aiming for an 80-percent cut by 2050.

“The 2020s are crucial in setting the direction for U.K. power generation, and to ensure the U.K. can meet its 2050 climate change commitments cost-effectively,” John Gummer, a member of the House of Lords who leads the panel, said in a statement. “The government must now urgently clarify the direction of future policy to ensure the power sector can decarbonize at lowest cost to businesses and households.”

Prime Minister David Cameron’s government has announced cuts to subsidies for wind, solar and biomass plants since coming to power in May, shaking investor confidence in renewables and leading to job cuts in the solar industry. Energy Secretary Amber Rudd has said the reductions are necessary to cut costs to consumers, who fund the assistance through their energy bills. 

The Treasury is concerned about exceeding spending limits that it set on low-carbon energy under the so-called the Levy Control Framework, which caps expenditure at annual levels, rising from 4.3 billion pounds ($6.6 billion) this tax year to 7.6 billion pounds in fiscal 2021.

The committee said the government should boost the cap to about 9 billion pounds in 2025, assuming the price of carbon is 42 pounds per metric ton. If the carbon price is half that, support would need to rise to 9.8 billion pounds, it said.

In the first half of the 2020s, onshore wind and ground-mounted solar panels will already represent “good value investments,” the panel said. Offshore wind, nuclear power and potentially coal plants equipped with carbon capture and storage units would become competitive in the second half of the decade, according to the committee.

Low carbon forms of power would compete without subsidy if gas-fired power plants were required to pay the full cost their pollution and the cost of emitting carbon rises to 78 pounds a ton in 2030, the panel said.

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