By SARAH KENT
LONDON -- A report released by the British Geological survey on Thursday shows the UK's shale gas potential is 1,300 trillion cubic feet, double previous estimates, the UK government said.
The UK is promoting the development of its shale gas reserves in the hope that it can replicate the success achieved in the US, where prices of gas have tumbled thanks to a boom in its shale gas industry.
The government is also set to announce strike prices for renewable power generation, which will see the government guarantee a certain price for investors, Danny Alexander, chief secretary to the Treasury told parliament in a speech, adding that prices have been set for key renewable technologies including on-shore and off-shore wind, tidal, wave, bio-mass and solar.
Although Mr. Alexander didn't set out the strike price for all forms of power in his speech, he said off-shore wind generators would be guaranteed GBP155 per megawatt hour from next year, though this would decline to GBP125 per megawatt hour by 2018.
"We expect our reforms to bring forward 8 to 16 giga-watts of offshore wind capacity," Mr. Alexander said.
"Industry asked for certainty. We've given it. So now they need to get on with it," he added.
To promote investment, the government is also providing its Green Investment Bank with an additional GBP800 million and will give it the power to borrow GBP500 million from the government in 2015 and 2016, he said.
The government is also planning to role out a new regime to guarantee capacity is available at short notice during spikes in demand, Mr. Alexander said, announcing that the first auction for a new capacity market will run in 2014.
Mr Alexander also said the capacity market will provide financial incentives to utilities to retain power plants as reserve capacity, in order to "guarantee that capacity will be available at short notice to meet spikes in demand."
Dow Jones Newswires