Page last updated at 17:04 GMT, Friday, 12 December 2008

Power blackouts warning from MPs

Gas storage tank in London
More gas storage facilities are needed, MPs say

The UK is running out of time to prevent a "disastrous energy crunch" as the downturn imperils investment in new energy supplies, MPs have warned.

The threat of future blackouts is "real", the Select Business and Energy Committee has warned, unless existing coal and nuclear plants are replaced.

Plants supplying about a third of the UK's energy needs will close by 2020.

Ministers said it was wrong to talk of an energy "crunch", saying firms were aware of the need for new investment.

'Losing time'

The government has made energy security a key priority amid concerns about future over-reliance on imported gas from countries such as Russia.

The concern that people have about prices will be a picnic compared with significant number of power cuts
Peter Luff MP

But in a new report, MPs said the energy industry needed to raise its game if the threat of power shortages was not to become a reality.

"The concern that people have about prices will be a picnic compared with significant number of power cuts," said committee chairman, Tory MP Peter Luff.

"That possibility is real," he added. "It still can be avoided but we are losing time."

The report says the government must ensure that all nuclear and coal-fired power stations reaching the end of their natural lifespan in the next 20 years are replaced.

Ministers are backing a new generation of privately financed nuclear plants but MPs are concerned that a prolonged recession could reduce the resources available to build them.

"Just as the government has been quick to respond to the crisis in the banking sector, it must now take action to ensure investment in new capacity as planned," Mr Luff said.

Priority should also be given to increasing the UK's gas storage capacity, the report added, to reduce the exposure to price volatility.

Mr Luff said ministers should lay out detailed projections of what storage capacity would be needed and how it will be paid for.

"A radical re-think is now required if the lights are to stay on in the medium term," Mr Luff said.

Ministers said they took the issue of energy security "seriously".

"We gave had reliable energy supplies for decades and the industry has shown that it is responsive and it is already building to meet future demand," a Department of Energy spokesman said.

"We are taking active steps to put in place the right conditions to make sure we continue to get that necessary energy investment."

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