Policy & Market


Gas enjoys new UK policy win as fracking ban is lifted

The UK government has lifted its suspension on shale gas exploration, risking renewed fears among supporters of renewables that its incoherent policy will damage clean-energy investment.

UK energy and climate change secretary Ed Davey says fracking can resume “subject to new controls to mitigate the risks of seismic activity”.

The controversial process was halted in 2011 after minor earthquakes in the northwest of England.

UK finance minister George Osborne is a robust supporter of a gas-friendly policy in the country's coalition government, a stance that has brought him into conflict with Davey’s own Department of Energy and Climate Change (DECC).

The division has caused unease among major foreign potential investors in UK renewables projects and infrastructure, who have called for more certainty and visibility over policy.

The UK may also offer tax breaks to shale gas, prompting claims from the low-carbon sector that more government support should come its way instead.

The UK government came under further pressure today when its own independent climate adviser, the Committee on Climate Change, warned that spiralling gas costs risk adding £600 ($967) a year to British power bills, compared to around £100 under a low-carbon policy approach.