By Ryan Crighton Press and Journal
Published: 04/02/2010
The UK Government has been warned it will have to rely on Scotland to “keep the lights on” after its energy regulator said power shortages could hit Britain within three years.
Ofgem has revealed £200billion of investment is needed to guarantee supply over the next two decades because of diminishing gas supplies, rising international tensions, and crumbling infrastructure.
In a report out yesterday it raised the prospect of a return to the pre-Thatcher era of publicly controlled electricity and gas boards.
The watchdog said failure to reform the energy system could mean power shortages after 2015, while inaction would lead to a “degree of crisis” in three or four years.
It has predicted average household bills could jump as much as 25% and lists five possible solutions to the problem – the most drastic being the creation of a body like the old Central Electricity Generating Board that would set the amount and type of new power generation required.
The report omitted any final recommendations regarding locational charges, which have meant wind, wave and tidal power companies in the north and north-east being charged more to transmit electricity to the national grid than their English counterparts
SNP energy spokesman at Westminster, Mike Weir MP, said last night the report missed the point.
He said: “It’s rather strange that – 20 years after the break-up and privatisation of the energy companies – Ofgem are proposing a return to centralisation as a way of solving the problems the energy industry faces today.
“Scotland’s renewable energy potential is 10 times our actual need – a resource the UK will undoubtedly have to rely on to keep the lights on.
“The current transmission regime was developed for a grid where the power came from big coal, gas and nuclear stations which were often nearer the centres of population.
“It is not fit for a new century of energy production. Instead of glossing over this massive problem, Ofgem should be addressing it as a priority.”
Uncomfortable
Ofgem said staying with the current market model was “not an option” as power supplies strain under the pressure of the financial crisis, environmental targets, dependency on imported gas and the closure of ageing power stations.
Chief executive Alistair Buchanan said without reform the situation could become “quite uncomfortable” and customers would end up footing the bill for costly short-term solutions.
The government has indicated it will consider the report in its proposals for energy to 2050, due at the time of the Budget.
But Energy and Climate Change Secretary Ed Miliband said it was confident of meeting energy supply needs, with a low-carbon transition plan delivering secure supplies until 2020.
Ian Parrett, of energy consultant Inenco, warned Britain had already left it too late to bridge the gap between older power stations going off-line and the emergence of new supplies “without making painful choices”.
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