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Business

Energy analyst David Hunter: power warnings have come too late

By: KentOnline reporter multimediadesk@thekmgroup.co.uk

Published: 10:17, 04 February 2010

Updated: 10:17, 04 February 2010

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by business editor Trevor Sturgess

Official warnings about energy shortages and soaring prices have come too late, according to a Kent expert.

David Hunter, energy analyst for McKinnon & Clarke, based at Oad Street, near Sittingbourne, said the Government had lost a decade of energy planning and shared concerns that without urgent action, the UK lights could go out by 2015.

It should have invested more in new power generation facilities well before now.

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The report by OFGEM, the industry regulator, casts doubt on on the industry’s ability to deliver sufficient power by 2015. It recommends far-reaching reforts of the energy market to ensure plentiful low carbon energy supplies well into the future.

Its proposals were wide-ranging and radical but rather late, he said. "OFGEM is effectively admitting that it, and the Government, have lost a decade of energy planning. The country needs to find £200billion - at least - to invest in its energy infrastructure by 2020 to meet the UK’s energy needs."

There should have been more investment in nuclear and renewable generation, capacity payments to secure power station availability, and a reasonable floor on the carbon price to create a level playing field for low carbon generation.

Mr Hunter blamed the watchdog for overseeing low investment and creating market conditions that are "clearly not working". No wonder our power stations are on their last legs, he says.

By 2015, there would be a worrying dependence on foreign gas to generate power - as much as 75 per cent - because new nuclear, wind and clean coal facilities would not be ready in time.

Mr Hunter believes it is inevitable customers will have to foot the bill.

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"Consumers, who are already paying near-record prices for their gas and electricity, will have to stump up for further increases in order to pay for the belated response to what has been a glaring shortfall in future supplies."

The CBI employers’ organisation echoed Mr Hunter’s fears. John Cridland, deputy director-general, said: "This report serves as a stark warning existing policy will not deliver the balanced energy mix needed to provide security for the UK, help cut carbon emissions, and maintain competitive prices."

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