The author claims that EU policy of subsidising renewables (rather than taxing CO2) hinders development of the gas sector Two money quotes:

"The trouble is that Europe has quietly abandoned its carbon dioxide policy, based on emission pricing, in favour of a renewable energy policy based on direct (and very high) subsidies. This shift has dire implications for gas. Because emissions from the power sector are capped under the Emissions Trading Scheme, aggressive renewable deployment depresses the carbon price, allowing coal to remain competitive against gas."

"If their (rightful) lobbying for moving back to carbon pricing and away from subsidies is not successful, the best the gas industry can hope for is that Europe’s (and the UK’s) renewable energy policy proves so costly and problematic that it collapses under growing political pressure."

21 Mar 2012 - 5:42
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