November 12, 2010 / 1:34 PM / in 9 years

UK could save billions by focus on gas future: ENA

LONDON (Reuters) - Britain could save nearly 700 billion pounds ($1.1 trillion) by 2050 if it continues to use gas as a major fuel, a group representing UK energy transmission companies said in a report Friday.

The Energy Networks Association’s (ENA) ‘Green Gas’ scenario in the report assumes gas will continue to be used for power generation and heating, that technology for carbon capture and storage (CCS) will be rolled out and that the use of a dual-fuel heating model will limit the need for gas to peak-load demand.

The energy ministry opened a 9.5 billion pound competition to fund CCS technology to gas-fired projects Monday.

A gas-intensive scenario would save Britain billions of pounds, because it would require less new infrastructure and generation capacity than a model involving more renewable and nuclear energy, the report said.

“Gas is a bridge to the future as a major part of our energy mix in the UK and Ireland. We can achieve a lower-cost option for investment whilst addressing the need for an affordable, secure and sustainable future for our energy needs,” ENA Chief Executive David Smith said.

The ‘Green Gas’ scenario includes a forecast that global gas prices will remain relatively low due to increased unconventional extraction of gas.

It also assumes that energy storage will remain underdeveloped, raising the need for gas for peak-time heating and electricity generation.

“Fuel costs represent a higher share of system costs under scenarios with ongoing gas usage. Our cost comparisons are therefore potentially sensitive to assumptions around commodity prices,” the ENA said.

The report found that the Green Gas scenario, even with strong commodity prices and fast development in new energy-saving technology, would still prove to cost less than scenarios that require investments in network connections for new green power plants.

Reporting by Karolin Schaps, editing by Jane Baird

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