A new report on household energy costs from the U.K.’s Committee on Climate Change highlights what a different world it is outside the cheap-gas bubble that is the United States.
In the U.S., the shale gas boom is widely embraced as a godsend, a fantasy-come-true of vast supply and low prices. Few seem to mind that it won’t last forever and “presents the prospect of imminent harm to the deployment of renewable energy,” as the energy researchers Kevin Doran and Adam Reed wrote this past summer. But in the U.K., the CCC, an independent panel formed by law to advise the government on these contentious policy questions, is sounding the alarm about betting too heavily on gas.
True, the committee did find that investments in “low-carbon technologies will increase annual energy bills by around £100 by 2020 (a 10% increase on the 2011 bill) for an average ‘dualfuel’ household (i.e. for the 86% of households that use gas for heating and electricity for lights and appliances).” But looking past 2020, the committee said, the resources put into renewables could very well protect the country against the vagaries of the gas market:
In an alternative scenario with investment focused on unabated gas-fired generation, there is a risk of much higher cost increases in the long term (e.g. the average annual household bill in a gas-based system could be as much as £600 higher in 2050 than in low-carbon system if gas and carbon prices turn out to be high).
The Conserative Chancellor of the Exchequer George Osborne has outlined a program of aggressive pursuit of shale gas in Britain, in what some have labeled a “dash for gas.” But renewables advocates seized on the committee report as a rebuke to Osborne.
“This report proves that the pound in your pocket is safer with renewables, rather than with gas,” Mary McCaffery, RenewableUK chief executive, said in a statement. “We know how much renewables cost, but gas has proved to be an extraordinarily volatile commodity. We must loosen its grip, for the sake of all of us hard-pressed bill payers, by switching to a more affordable mix of renewable sources.”
The Committee on Climate Change note that gas prices have already hurt British households; it found that from 2004 to 2011, increases in gas prices drove up household energy bills 62 percent, while support for low-carbon technologies and energy efficiency improvement were each responsible for less than 10 percent of the increase in those bills.