The Government is keen to fast-track EMR legislation to provide planning stability for prospective investors in gas-fired power plants. "We looking at what we need to encourage new gas plants," he said.
The energy ministry and industry stakeholders are at loggerheads over details in the Electricity Market Reform (EMR), with operators of gas-fired plants calling for the introduction of capacity payment mechanisms to underpin investment in new plants.
The low carbon intensity of gas makes it the fuel of choice for power generation as Britain is aiming to meet ambitious goals to reduce carbon emission. "We need to see more gas coming through but in a way which takes account of our low carbon obligation," Hendry said.
"The earliest we can have a plant with carbon capture and storage is in the 2020s, the earliest we can have large scale wind is in the 2020s. But the energy pinch point is 'coming before that," he said.
As Britain is facing a looming gap in electricity supply, the short construction period gives gas-fired plants a competitive edge over nuclear plants which have a long lead time.
Natural gas is increasingly viewed as a destination fuel with a growing role in Britain's energy mix next to – and not in competition with – renewable energy sources.