Energy secretary Ed Davey unveiled plans to construct up to 26GW capacity of new gas-fired power stations in Gas Generation Strategy which was published alongside the Autumn Statement.
The strategy features a raft of measures to stimulate more investment in gas power stations including the creation of a new Office for Unconventional Gas and Oil to streamline the regulatory process.
Osborne said the gas strategy would “ensure we make best use of lower cost gas power, including new sources of gas”.
Unconventional gas includes shale gas, production of which could be increased under the new gas strategy. The UK’s only shale gas developer, Cuadrilla, welcomed the announcement.
Davey has previously said that increasing gas generation capacity would not undermine investment in wind. “The solution is not wind or gas - it is both,” he said.
Gas accounted for 40% of UK generation in 2011, according to government figures. More than 14GW of capacity for gas power generation has been consented and a further 2GW is under consideration.