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UK: Government 'failing' on energy crisis

BRITAIN is moving closer to a blackouts crisis in the energy industry, as the Government was today accused of wasting another year by burying its head in the sand.

In a report published today, the Institution of Civil Engineers (ICE) said the Department of Trade and Industry fails to grasp that a shortfall caused by closing nuclear and coal-fired power stations cannot be replaced in time by the growing investment in wind farms.

'Last year we asked the question, will the lights stay on? One year on the Government still believes that the market will provide and that renewables and energy conservation will bridge an impossibly large shortfall,' the ICE report says.

'Today, electricity is generated by 35% from coal, 22% from nuclear, 38% from gas, 2% from renewable and 3% from other sources.

'By 2010 that mix will be very different, with coal falling to 17% and nuclear to 16%. Six years is a perilously short time to make good the generation gap.'

David Anderson, chairman of the ICE's energy board, said: 'The Government is busily promoting renewables, but since we warned about the future of energy supply not much has been done and another year has gone by.'

He says electricity companies are not investing in new, cleaner, gas-fired plant because they cannot make an economic return.

Power generators need a sufficient 'spark spread' - the difference between the cost at which they buy the gas and then sell the electricity - but that is being hampered by rising wholesale gas prices in a competitive energy supply market which is keeping retail electricity prices down.

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