better generation

The UK energy regulator, Ofgem, has warned of future power shortages due to “reasonable doubt” over the energy market’s ability to provide sustainable supply over the coming decade. Moreover, the energy companies will need huge incentives for the major £200 billion investment that the industry needs. In addition, it is believed that many consumers will not be able to afford the predicted high energy prices.

Ofgem’s chief executive, Alistair Buchanan, believes that “unprecedented challenges” from “carbon prices”, “the credit crunch” and “maintaining international supply” means there is a more urgent need for new ways of securing the energy supply. Therefore, energy companies need to increase their generation capacity and improve gas storage, which currently stands at only 5% of the UK’s annual demand. According to a report from the University of Sussex, gas currently provides 40% of the UK’s primary energy, mainly for heating, hot water, cooking and industry, in addition to meeting 45% of electricity needs.

Further ways of minimising and mitigating energy security concerns could be through managing consumer demand and diversifying supply. Energy efficiency measures in homes and businesses can lead to reduced consumer demand and less price spikes. Diversifying supply can be met through macro and microgeneration from renewable energy, as well as ensuring that any imported gas is not dependent on one particular source.