Investment in energy generation has "almost ground to a halt" because of political uncertainty, the head of gas giant Centrica has warned.
Labour leader Ed Miliband’s promise to freeze energy prices if his party is elected next year and Energy Secretary Ed Davey’s suggestion that Centrica’s British Gas unit may need to be broken up because its profit margins were excessive, are examples of increasing political intervention in the UK energy market, chief executive Sam Laidlaw said.
Speaking at an international energy conference in Houston, Texas, he warned politicians that security of supply risks becoming the "forgotten priority" of European energy policy, as he predicted that the UK will rely on imports for up to 70 per cent of its gas needs by 2020, compared with 50 per cent now.
"Political uncertainty is the enemy of investment. As a result, investment in new UK generating capacity has virtually ground to a halt," he said.
In the UK an estimated 3.7GW of coal-fired generating capacity will be shut down by the end of 2015 as a result of European directives to curb emissions and the country's reserve capacity is forecast to shrink to 4 per cent, increasing the risk of power cuts.
Despite this, no new capacity is being built, he said.
He added: "In primary energy, the UK's production of gas is falling rapidly. North Sea oil and gas output has fallen by 38 per cent over the last three years. By 2020 we will be reliant on imports to meet 70 per cent of the country's gas needs. So when it comes to security of supply, there is a pressing need for solutions."
He told international industry leaders that with 80 per cent of UK homes heated by gas, the country must look to diversify sources.
Centrica, which owns British Gas, last year signed a 20-year deal with Cheniere to export liquefied natural gas from Louisiana with the first cargo due to be shipped in September 2018. It has also taken a 25 per cent stake in the Bowland shale licence in Lancashire.
Shale gas, produced by the controversial fracking method, had the potential to make a significant contribution to the UK's future energy mix, but it was unproven and faced "many challenges".
Laidlaw said new technology and concerns about affordability have driven customers to take "unprecedented control" of their energy use.