The energy regulator Ofgem has warned that energy bills will go up due to power station closures and an increasing reliance on imports.
The comments, made by Ofgem chief executive Alistair Buchanan, come as older power stations are taken offline with newer renewable energy sources still not ready.
Problems in ‘three to five years’
The shortfall means that power capacity, according to Mr Buchanan, will become very tight in ‘three to five years time’ with plant closures already authorised.
Speaking to the BBC he said: “We’re going to have to go shopping in world markets at a time when they will be very tight themselves.”
“There isn’t a single person or people to blame. In my view it was a single event – the financial crisis.
“Before the financial crisis the government had backed a a visionary approach to energy on wind, water and nuclear… then came the financial tsunami.”
His comments come just three days after David Cameron’s remarks that the government’s renewable energy policy, as laid out in the Energy Bill, should focus on bringing down bills, not green ‘preaching’.
40% of electricity comes from old coal stations
Responding to Mr Buchanan’s comments, Angela Knight CBE, chief executive of Energy UK, the energy industry’s trade authority said: “The regulator is highlighting an area of very real concern. On days like today around 40% of electricity is being produced by coal fired power stations that are being phased out.
“The UK is committed to moving to more renewable electricity production and to building new nuclear power stations to replace the old ones that are coming to the end of their life.
“It is essential that the authorities pay close attention to the transition such as assessing what capacity is needed and what headroom is required, and creating a mechanism that allows for steady phasing out of old plant as new technology comes on stream to maximise stability and give confidence to customers and to generators.
“They then need to get on with exploring the options for UK shale gas reserves to help energy security and focus on the affordability of energy to households and the competitiveness of British industry.”
Meanwhile Juliet Davenport OBE, CEO and Founder of Good Energy, said: “Alistair Buchanan’s warning shows how we risk paying the price of our past failure to invest in renewables technology to protect our homes, our businesses and our economy from increasing uncertainty around energy supplies.
“We’ve got all the renewable energy resources we need right here in the UK to do that. We simply shouldn’t be in the business of having to import more and more gas to keep our lights on and our homes warm.”
Energy Bill – The government lays out its plan for energy in the UK.