Does a switch from coal to gas make sense?

All hydrocarbons pollute, but not all hydrocarbons pollute equally.

When it comes to climate change, coal is the standout villain - it's dirtier than oil and much dirtier than gas.

If the world is going to stand a chance of stabilising the amount of carbon dioxide in the atmosphere, it has to cure its addiction.

Coal mining in Britain may be on its last legs, but we are still burning coal imports to generate electricity like its going out of fashion, which regrettably it isn't.

The reason coal remains such a popular source of energy is that the price of consuming it doesn't reflect the environmental damage it causes - in that sense the market is broken.

Coal remains plentiful and cheap, thanks in part to America's recent discovery that it's sitting on of enough shale gas to keep it going until the end of this century.

Energy Secretary Amber Rudd. Credit: PA

This morning Amber Rudd has announced that all of Britain's 12 remaining coal-fired power stations will close by 2025. In truth, they were on the way out anyway.

The EU's Large Combustion Plant Directive is forcing coal plants to either upgrade or shutdown, most have opted for the latter. In the next year Eggborough, Longannet and Ferrybridge are set to close.

Another EU directive sits on the horizon. The Industrial Emissions Directive comes into force in 2022. Coal plant extinction was in sight, but it will now happen a few years earlier than anticipated.

The obvious loser here is Drax power station - the biggest in Western Europe, which generates 7-8% of Britain's electricity.

It's a serious and structurally important bit of kit and was the last coal-fired unit that Britain built.

In recent years, two of its six units have been converted to biomass, thanks to £700m of Drax's money and £500m of subsidy which has been added to consumer bills, largely without our knowledge.

Drax's shareprice took a pounding in July when the Chancellor unexpectedly announced the removal of the climate change levy exemption (a tax on carbon output). This will feel like another kick.

Drax power station in Yorkshire generates up to 8% of Britain's electricity. Credit: PA

Shipping wood pellets from North America to Yorkshire isn't everyone's idea of green.

But at least Drax can be relied on to provide reliable baseload energy at a reasonable price, which is more than can be said for other renewables. Offshore wind in particular, which regularly blows in a way that delivers anything from electricity in abundance to next to none at all.

Since the election, there's been a striking change in the government's energy policy.

The government has rolled back renewable subsidies for onshore wind, solar power and biomass. The Green Deal insulation scheme has been scrapped.

Amber Rudd believes that under previous governments the dash for renewables was too enthusiastic - that money has been not always been invested wisely.

Green lobby groups, NGOs, renewable companies are horrified and question the government's commitment to tackling climate change.

But there are plenty of independent, credible voices that have been challenging the effectiveness of current renewable technology and the logic of how precious resource has been spent.

Ferrybridge power station will close in 2016. Credit: PA

Amber Rudd is easing off the renewables and hitting the gas.

The average gas plant is about half as polluting as a coal plant so the plan over the next ten years is to build more gas and phase out coal, keeping the lights on and putting a serious dent in the UK's carbon emissions.

The problem, as it stands, is there's little incentive for companies to build gas-fired power stations. In fact, in recent years they've been mothballing, selling and demolishing them as gas has struggled to compete with coal and renewables.

The market will have to be reshaped. Government intervention will be necessary. That means more subsidies and higher energy bills.

Amber Rudd talks about her desire to "cut carbon emissions as cost effectively as possible".

But don't be fooled - decarbonisation won't be painless. Tackling climate change will take billions of pounds. Who pays? It's either taxpayers or consumers, we are both.

In the short term, gas looks an attractive alternative. But it's a hydrocarbon, and in the long-term it's part of the problem.

If current renewables aren't considered a cost-effective solution to climate change then what is? Nuclear?

Hinkley Point nuclear power station in Somerset. Credit: PA

The £24 billion it will take to build Hinkley Point in Somerset is set to get loaded onto our bills.

Hinkley will generate 3.2GW of electricity. It's low-carbon, undoubtedly, but money well spent?

Peter Atherton at Jefferies calculates that £24 billion could buy you a fleet of gas-fired power stations capable of producing 50GW.

Conventional renewables may be imperfect, but there are consequences to hacking back the amount of government support on offer.

Jobs are already being lost and quite where this leaves the legally-binding promises the government has made to cut our emissions isn't clear.

By 2020 15% of Britain's final energy consumption is supposed to come from renewable sources - as it stands 6.3% does. That target now looks a serious stretch.

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