£200bn investment needed to safeguard power industry
Power industry regulator Ofgem has painted a bleak picture of the world's energy future claiming massive investment is needed to safeguard it.
In its latest report, released today (October 9),Ofgem states to maintain current energy supplies and meet carbon targets investment of up to £200bn will be needed.
The report focuses on four challenges facing Britain’s gas and electricity supplies in the ten to 15 years.
The biggest problem it identifies is the UK’s growing exposure to ‘a volatile global gas market’ and power stations ‘nearing the end of their life’.
It also fears a continued recession will halt investment in new infrastructure, as seen with the Kingsnorth announcement yesterday (October 8).
The £200bn of investment is likely to be generated with large scale price increase – passed on directly to consumers.
While the UK will also face significant levels of gas imports, in particular for gas power plants to replace lost nuclear and coal-fired capacity.
This increases our exposure to uncertainties in the global gas market, supply disruptions and potential price increases.
Ofgem chief executive, Alistair Buchanan, said: “Our scenarios suggest Britain faces a tough challenge in maintaining secure supplies whilst at the same time meeting its climate change targets.
“However, there is still time to act Ofgem will be putting forward proposals in the New Year based on today’s consultation to ensure Britain’s energy industry can meet the challenges ahead.”
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