New Manchester gas power plant could be first of 20, says Energy Secretary

However Ed Davey told the Guardian newspaper that a new generation of gas power stations, intended to replace some of the UK's ageing coal power stations, would not come at the expense of investment in renewable energy or the Government's carbon reduction targets.

"I strongly support more gas, just as I strongly support more renewable energy," he told the paper. "We need a big expansion of renewable energy and of gas if we are to tackle our climate change challenges."

He was commenting as Irish energy company ESB announced that its Carrington Power Limited subsidiary had reached financial close on a deal which will enable it to build a combined cycle gas turbine (CCGT). The new plant, which the company claims will generate enough electricity to meet the needs of one million homes, is scheduled to be commissioned by 2016.

The Government is expected to announce a new gas generation strategy in the autumn, and Davey has indicated that it could include the construction of an additional 20GW of electricity generation capacity from gas between now and 2030. Support for low carbon gas generation has been included in the Government's electricity market reform programme, which it has claimed will provide potential investors with "transparency, longevity and certainty".

Around one fifth of the UK's existing power generating capacity is due to come off-line over the next decade due to aging power plants and more stringent environmental standards, while an increasing amount of the country's power will be generated from intermittent sources such as wind. By incorporating the use of carbon capture and storage (CCS) technology, which prevents CO2 from being released into the atmosphere when gas is burned to generate electricity, the Government has said the gas plants could potentially generate significant quantities of low-carbon electricity. However, there has not yet been a demonstration of a full-chain, 'source-to-sink' CCS project in the UK.

In a statement, Davey described ESB's announcement as "great news for the UK's energy security" and "great news for the Manchester area in terms of investment and jobs".

"Conventional gas fired power generation needs to remain in the energy mix for some time, even as we seek to develop alternative low carbon technologies such as renewables, nuclear and carbon capture and storage," he said. "We urgently need to replace some of our ageing coal power stations and gas is relatively quick to build and half as polluting."

According to the Government's latest quarterly energy statistics, gas accounted for just under 30% of total UK energy generation over the second quarter of this year - its lowest second quarter share in the last fourteen years, as a result of high gas prices. Coal accounted for 36.1%, or its highest second quarter share in the last fourteen years, while renewables accounted for 9.6% - a small increase over the same period last year.

Described as "the widest reform of the electricity market since privatisation", the EMR programme proposes a new system of financial incentives designed to ensure that low-carbon forms of electricity generation can compete fairly in the marketplace, backed with a 'capacity market' aimed to ensure that consumers continue to benefit from reliable supplies at an affordable cost. It also proposes a new Emissions Performance Standard (EPS) which will prevent the construction of new coal plants which emit more than 450g of emissions per kWh generated. However, this figure is above the 400/kWh typically emitted by new gas-fired power stations.

The EPS will be guaranteed under the legislation, and 'grandfathering' provisions will apply to ensure than any power stations granted consent at the initial 450g limit will be subject to that level until 2045 even if it is reduced for new plants. The Government has previously said that this will provide "long-term certainty" to investors looking to build new gas plants.