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Energy crisis may add £500 on to family bills, warns Ofgem
Jonathan Prynn, Consumer Business Editor3 Feb 2010
Britain is sleep-walking into an energy crisis that threatens Seventies-style black-outs and huge increases in bills, a report warned today.
Without “unprecedented” levels of investment of up to £200 billion there is “reasonable doubt” about whether the lights can stay on in the next decade, says energy regulator Ofgem.
The Project Discovery study concluded that without urgent action Britain's energy infrastructure will be overwhelmed by the impact of the financial crisis, tough new environmental targets, dwindling domestic gas reserves and the mass closure of ageing nuclear plants and polluting coal-fired power stations by 2020.
Experts warned the report painted a grim scenario that would make the recession “pale by comparison.”
It is by far the most outspoken warning from Ofgem's chief executive Alistair Buchanan, who told the Government that leaving the privatised system for supplying gas and electricity “is not an option.”
He said: “Our evidence shows that Britain has a window of opportunity to put in place far-reaching reforms to meet the potential security of supply challenges we may face beyond the middle of this decade. ” The report says that the key decisions on investment need to be taken by 2013.
It suggests five policy packages to address the problem but admits they all involve higher bills for consumers largely because of “the level of investment required.”
One commentator said average bills may have to rise to £2,000 per household. Mark Todd, director of independent price comparison website energyhelpline, said: “This is a bombshell announcement. The price of fuel has already trebled since privatisation and Ofgem is making it clear that we are all going to have to pay a lot more to guarantee supplies in the future.”
In a worst case scenario bills could rise by more than half by 2016, adding more than £500 to a typical family bill in today's prices.
Energy minister Ed Miliband said: “The Government is confident that Britain will meet its security of supply needs in the years ahead. However, for the longer term... the scale and upfront nature of the low carbon investment needed is likely to require significant reform.”
Hot tips
Heat the room you use the most — turn heating down in others
Close internal doors to stop heat escaping
Close curtains after dusk. If they're over a radiator, tuck them behind to keep warmth in
Pull furniture away from radiators so warm air can circulate
Don't keep electrical equipment on standby
Only put full loads in the washing machine and dry washing outside
Keep lids on saucepans
Cook in big batches
Don't overfill your kettle
Reader views (9)
If we the Public freeze, then there will be a large back lash.We have 300 years of coal under our feet and the only country in this world who is not using it.A Government in the future will have to Nationalise the Power Industry and leave the EEC.
- Stan White, leeds, 04/02/2010 08:37
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Just use the massive profits of energy companies
Simples
- Ofgem Is Toothless, London, 03/02/2010 23:39
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The Gas and Electricty companies do not need any help from OFGEM the governments regulator and friend to the consumer!! in finding ways to increase prices. This latest announcement that we might endure blackouts in the future if we dont pay more is scaremongering at its worst and proves what i have always thought, that these bodies are simply there to back up big business and do nothing for the paying public. Close them down they are useless to us, the money spent on them could be put to better use.
- Mr S.Port, London, 03/02/2010 22:01
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In 13 years labour has done nothing about power supplies. The turgid planning procedures stops any private progress in its tracks--and that is before the luddite lefties try to tear down the power stations. And if you want to blame privatisation, you weren't around in the 70s when I had to sit and study at night by candlelight because our nationalised power companies kept going on strike, thanks to labour under Callaghan and Wilson. And back then you had to wait 6 months for a telephone because it was a govt owned company. Nationalisation is what the East Germans enjoyed when they had to wait 5 years for a Trabant.
- John Bell, Nottm UK, 03/02/2010 18:18
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The cost will be even higher as more people become fuel poor and those that do pay will have to subsidise even more people.
- Chris, Rochester, 03/02/2010 18:10
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Re-Nationalise the power companies; and build new nuclear power stations with the unemployed building workers, and finance that all from reduced unemployment benefits and less financial aid to bankers.
A Country with fewer banks will survive just fine; but a country without full power services for the nation, at reasonable cost, will not be fine, everyone will suffer; including bankers, politicians, and the wealthy, not to mention industry.
Idiots sold our national utility companies; now let the wise and clever; take it all back etc.
If not; we will deserve the consequences to come etc.
- Mickinlondon, london, 03/02/2010 14:54
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"...the scale and upfront nature of the low carbon investment needed is likely to require significant reform.”"
What exactly does that mean?
And thanks to Milliamp, our energy bills will increase by an extra 15% to pay for all his rich friends' Carbon Trading racket.
- Kate, London, 03/02/2010 14:39
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This is what happens when you have a society without a conscience and big companies become greedy. Also the fact that we have to 'import' all our energy now as none of the companies are British! You reap what you sew.
- Sue, Kent, 03/02/2010 14:28
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Here we go again, being treated as though we have just crawled out of the caves. Here are some of my tips to save energy: Renationalise our power supplies, build clean nuclear energy plants and stop 'fatcats' from taking large amounts of money from their illgotten profits. Oh, and one last thing, provide free heating to all pensioners on state pensions..
- Chris, Kent, 03/02/2010 13:56
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