MPs given power blackouts warning

Power blackouts could blight Britain unless the Government takes urgent action, the chairman of an influential House of Commons committee warned.

"The concern that people have about prices will be a picnic compared with significant numbers of power cuts," said Peter Luff, chairman of the business and enterprise committee. "People could find they are watching the telly and suddenly it goes off for an hour or two.

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

The committee has published a report which warned new capacity to store gas and generate electricity must be created if a "disastrous" energy crunch is to be avoided.

The report, Energy Policy: Future Challenges, said difficult economic conditions make it less likely that energy companies will make the necessary investment to safeguard future supplies.

The committee said there is a "high risk" that energy companies will not be able to raise the money to replace capacity lost when old nuclear and coal-fired power stations are decommissioned.

"Generating capacity equivalent to nearly a third of current electricity demand will be made redundant by 2020. It will need to be replaced," the report said.

"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 takes place as planned."

The report said gas storage capacity needs to grow "if the UK is to avoid falling victim to even higher levels of wholesale gas price volatility in the coming years".

Possible solutions include a storage obligation on gas shippers, suppliers or the National Grid, it said.

The committee called on the Government to bring forward its national policy statement (NPS) which is not due to be published until 2010 and urged that it sets out in detail what level of storage it wishes to achieve in the next decade.

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