|
|
Ofgem sets out fears over energy supplies Customers will be paying sharply higher energy bills by 2020 unless they dramatically cut their usage, because energy prices will rise by up to 25 per cent and could spike much higher in the interim. In the second half of the coming decade energy capacity margins could sink lower than they have ever been, and "life could get pretty cold". That was the message from Alastair Buchanan, chief executive of energy regulator Ofgem, as he published a consultation over the UK's energy future that could result in fundamental changes in the UK's energy market. The consultation - dubbed "Project Discovery" - comes in the face of shrinking capacity in the UK electricity generating market that will leave little generation margin until new-build supplies are completed. Buchanan pointed out that investment of up to £200 billion would be required for the supplies planned to come on line in the next decade. He said the UK market had to provide the right investment climate for that raft of new generation, despite the recession. The regulator also highlighted a switch in gas supplies, because North Sea supplies were dwindling and the UK would increasingly rely on piped gas from sources such as Russia and liquified natural gas (LNG) from world sources. Buchanan noted that the recession had delayed investment in some Russian gas fields that the UK had anticipated coming onstream. Although the UK has invested in LNG import facilities, the regulator said he wanted opinions on whether current market structures would bring supplies into the country. The regulator set out potential routes for the coming decade in four scenarios - Green stimulus, Green transition, Dash for energy and Slow growth. In all scenarios, he said, carbon dioxide emissions would fall, and in all prices would rise. The only way domestic or industrial consumers could maintain keep bills down would be to dramatically improve energy efficiency. Energy and Climate Change Secretary Ed Miliband said: "The most important thing about Ofgem's report is that it emphasises the need to - as we are doing - get on with new nuclear power, new renewables, including wind which is unpopular with some people, and clean coal. And we are doing all of those things. "Reforms to the planning system and convincing the public about renewable technologies are also part of the strategy. However Government will need to intervene to ensure Britain's energy security and transition to greener supplies. "I think Government does need to play more of a role if we are going to get the low carbon transition and if we are going to get security of supply. But I'm confident that we can do it." More comments below. Download Project Discovery documentation here. Add your comments using the form below. Please note we will not publish your email address. Source: Utility Week © Faversham House Group Ltd 2009. News articles may be copied or forwarded
for individual use only. No other reproduction or distribution is permitted without prior written consent.
|
Highlighted Jobs |
|
|