Blackouts on way warn energy bosses

BRITAIN faces major blackouts in the coming years as coal and nuclear power stations are axed, electricity bosses claimed last night.

They united to warn the Government that its electricity strategy was in a shambles and the country was 'close to the edge' of a crisis.

There would soon be regular power cuts unless the Government intervened to encourage electricity companies to build new plants, they claimed.

Suppliers have seen their profit margins cut in recent years as competition in the market has forced prices down.

They are now feeling the pinch and want help from the Government to build a new generation of power stations. Shortages are looming as nuclear stations and coal-fired plants come to the end of their life.

Many of Britain's biggest power stations will be shut down as 'green' legislation from Brussels is introduced in 2007. ScottishPower, Powergen and Innogy are among those who have warned the system will hit disaster within four years.

They said that electricity shortages could become commonplace if urgent action is not taken to replace a dozen 'dirty' power stations facing the axe.

Experts argue that still more of today's plants are uneconomical to run and will also be taken off line, adding to the problem.

They claim Britain may have to rely on France and even Norway to supply electricity.

A Powergen spokesman said: 'In the next four years, we will not have the power stations to generate enough electricity. Something must be done. Our concerns are that there is no incentive to build power stations and many are ageing. On top of this there is the a new directive which will be the end of old coal-fired plants.'

Paul Beynon, director at Innogy, which covers central and southern England, said: 'The problems are stacking up and a lot of people are nervous.' Ian Russell, chief executive of ScottishPower, which serves customers in Scotland and England, said he was not prepared to invest in building new plants without Government support.

Bosses are demanding the Government reconsider its hardline against intervention in the market, which was reformed two years ago as part of Labour's manifesto commitment to deliver lower prices.

The warning comes after a report by energy watchdog Ofgen raised concerns of power cuts this winter - a throwback to the 1970s. Power cuts in Italy, the United States and in London in August have also revived public concerns about the issue.

Earlier this month, it emerged the power 'safety cushion' - the amount of spare electricity at peak times - was at its lowest level since 1995/1996. A spokesman for consumer group Energywatch said: 'Margins are getting tighter so any more closures could bring us close to the edge. Energywatch believes that the whole industry must get together to work out how to secure supplies by investing in alternative means of generation.'

Tim Yeo, Conservative trade spokesman, said: 'This is another sign that the Government's energy policy is in crisis. No policy means no power. It is alarming that there seems to be no suggestion that Ministers have analysed the risk of power cuts this winter and beyond.'

Since privatisation in 1990, electricity bills have been driven down so much that energy companies say they cannot afford maintenance work.

Companies have little cash to put back into the system, keep existing power stations open and build new ones.