Blackouts without major investment in energyEnergy bills could rise by 25% over next 10 years

04 February 2010

British households could face power shortages and higher energy bills in the years ahead unless a radical overhaul of the country’s energy supplies takes place. 

That's the bleak warning from the energy regulator, Ofgem, which has published its conclusions from a year-long investigation into the energy market.

Ofgem says around £200bn of investment is necessary from power companies - like British Gas, EDF, Eon, Scottish Power, Npower, and Scottish & Southern - to guarantee secure and sustainable energy supplies in the future. As a knock-on effect, consumers’ gas and electricity bills could rise by up to 25% in the next decade.

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Energy bills will rise

Speaking on BBC News, Ofgem chief executive Alistair Buchanan said: ‘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,’ Mr Buchanan explained.

Centralised energy buying

One of several measures proposed by the regulator was the establishment of a government-owned or regulated ‘energy buyer.’ Centralising the buying of energy – a form of nationalisation - instead of leaving it to the energy companies would to an extent represent a remarkable reversal of the privatisation of energy markets since the 1990s.

Other measures included the setting of a minimum carbon price to encourage companies to invest in low-carbon energy infrastructure, such as wind power, as well as requiring suppliers to demonstrate how they would cope with threats to the security of their energy supplies.

Which? has advice on how to buy solar panels, how to install a wind turbine and how to create a more energy efficient home.

Clarity needed

Responding to Ofgem’s announcement, Which? chief executive, Peter Vicary-Smith, said: ‘Ofgem’s report has identified a range of measures to ensure we have safe, secure and affordable energy in the future but it also raises the question of who is responsible for deciding which measures to implement and how to implement them.’

‘We urgently need clarity over who is responsible for securing our future energy supplies or vital time and money could be wasted. The Energy Bill is a great opportunity to provide this clarity.’

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