Ofgem Calls For Energy Reforms

• News
• Published: 03 Feb 2010 in Household and Gas Electricity

Consumers in Britain may struggle to fund their energy bills in the future unless action is taken to safeguard the country's power supplies, energy regulator Ofgem has warned.

Setting out proposals to safeguard the country's supplies, Ofgem said it was "not an option" to stay with the current market.

There was "reasonable doubt" over the security and sustainability of Britain's power supplies alongside issues such as the financial downturn, environmental targets, dependency on imported gas and the closure of old power plants, it said.

It put forward a range of suggestions to help release the estimated £200 billion Britain may need to invest by 2020 in order to ensure future supply.

Ofgem said the most far-reaching of these would be to create a central energy buyer that would set the amount and type of new power generation needed.

Ofgem said even the least of its suggested policy measures would require "significant changes" and the most radical was a "dramatic move away from competitive markets".

The regulator outlined the challenges to Britain's energy markets in October, when it warned that average household gas and electricity bills could reach nearly £2,000 a year without drastic action to shore up supply.

The document, which follows a consultation period, warns that the country may only have relative power security until 2015 and that an increasing number of consumers would not be able to afford enough energy.