This morning the Guardian reported that relying on gas would push up UK energy bills by £600 by 2020, whereas renewables would only increase them by £100. The basis of the article is a report by the Committee on Climate Change. A quick glance at the executive summary of the report makes clear that the Guardian reporter mixed up 2020 and 2050. The £600 figure is a projection of costs in 2050. The £100 figure is one for 2020. Not exactly apples to apples.
A secondary point, not mentioned by the Guardian, is that the £600 figure comes from a high carbon price scenario. How high?
£500/tCO2 is a rather high price on carbon. Given the farcical state of the ETS carbon price I would not want to predict it reaching this level by 2050.
How high do they think electricity prices will go under this scenario?
So, a pretty huge increase if you are relying on unabated gas (i.e. no CCS) for most of your electricity.
An immediate problem here is that a carbon price this high ought to force all gas plants to install CCS. So, a more credible scenario would be a high carbon price, but high amounts of CCS and no unabated gas. In an earlier report the CCS provided estimates of the cost of electricity from gas with CCS.
These prices ought to be a much more accurate prediction of the costs of electricity under a high carbon price and scenario. A quick glance at this also makes it clear that Gas with CCS may turn out to be cheaper than a grid with a mix of nuclear or renewables.
No one really knows what the cost of gas will be in the next few decades, or most other sources of electricity. This is another reason why I believe carbon pricing is the best way to deliver low carbon power. It should work even if we are wrong about the costs of different technology in future decades.