LONDON MPs on Tuesday rejected an amendment to the coalition government's Energy Bill which would have locked the power sector into tough carbon cuts from 2014, two years earlier than planned, and limited new gas plants being built after 2020.
Britain wants to explore the potential of shale gas to stem its rising dependence on imported gas and the vote comes just one day after it was estimated that its shale gas resources could be a lot higher than previously thought.
The amendment proposed that the government set a decarbonisation goal for electricity generation for 2030 no later than April 1, 2014.
The government has said it would consider a decarbonisation target in 2016, but amendment supporters wanted the date brought forward, arguing utilities would have to make long-term investment decisions before then.
The vote was tight, with 267 MPs in favour and 290 against.
"The Commons has missed an opportunity today to provide more clarity for investors on the future direction of energy policy," said Tim Yeo, who tabled the amendment and chairman of the Energy and Climate Change Committee, after the vote.
The energy bill will now go to the upper chamber of Parliament, the House of Lords, for consideration, which could suggest a similar amendment.
"Fortunately, the House of Lords still has a chance to amend the Energy Bill to ensure the government takes the advice of its statutory independent climate advisors for decarbonising the electricity generation industry," Yeo added.
Last month, government adviser the Committee on Climate Change (CCC) suggested that the carbon intensity of power generation be reduced to an average 50 grams of carbon dioxide (CO2) per kilowatt hour by 2030 from the current 500 gCO2/kWh.
The CCC said this would limit new gas-fired power plants after 2020, unless they are fitted with the as yet commercially unproven carbon capture and storage (CCS) technology or else as back-up for intermittent renewables.
It would also mean that new unabated gas plants would have to run at less than 20 percent full capacity on average by 2030.
Many businesses and campaign groups support a 2030 decarbonisation target, arguing it would give more certainty to clean energy investors and provide jobs, while opponents worry it could lead to higher energy bills for consumers.
Britain aims to cut greenhouse gas emissions by at least 80 percent below 1990 levels by 2050. To help meet that goal, the government has agreed to limit new coal-fired power plants from 2020 unless they are fitted with CCS.
Renewable sources, such as wind and solar power, cannot be solely relied upon to meet all UK energy demand and new nuclear plants are unlikely before 2020.
Therefore, gas-fired power has been seen as increasingly important to fill the gaps left by intermittent renewable production and the phase-out of ageing coal plants.
In December last year the government estimated available gas plant capacity at 37 gigawatts (GW) by 2030, some 5 GW higher than current levels.
Britain's Energy Bill proposes a major overhaul of the electricity market and is aimed at ensuring the European Union's second-largest economy keeps the lights on, diversifies its energy mix and secures billions of pounds of private sector investment in low-carbon sources of energy over the next decade.
(Editing by James Jukwey and William Hardy)