The UK could face power shortages in the years ahead, according to the energy regulator, Ofgem. The regulator also warned that a significant number of consumers may not be able to afford the higher energy prices they would have to face.
Ofgem said there was “reasonable doubt” about whether the UK’s energy market would be able to deliver sustainable supplies in the coming decade. The regulator said the industry needed £200bn of investment by 2020 but the energy companies may need stronger incentives before committing that level of funds. It would also have a knock-on effect on prices, leaving an increasing number of consumers unable to afford the energy they would normally use.
Previously, Ofgem had suggested the average household annual gas and electricity bill would rise by up to 25% to £2,000 or so by 2020. Chief executive Alistair Buchanan told BBC News: “Given the scale of investment, our bills are going to have to take some of the heat on that. Faced with the unprecedented challenge of carbon prices, the unprecedented challenge of the credit crunch and the unprecedented challenge of maintaining international supplies, we are looking at new solutions to protect security of supply.”
The regulator suggested a series of solutions that should be considered by the government owing to the uncertainty.
Published on the BBC.co.uk website on Wednesday 3rd February 2010 –http://news.bbc.co.uk/1/hi/business/8494899.stm