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UK energy Co's catastrophise over Greenhouse costs

Britain's biggest energy companies and unions will issue their starkest warning yet to ministers this week about the consequences of the Government's flawed energy policy.

Senior industry figures will say that the country faces power cuts in three years unless the policy is overhauled.

Andy Duff, the chief executive of RWE npower, one of the UK's largest electricity and gas suppliers, will warn that uncertainty and delays over new environmental legislation could cause the closure of gas and coal power stations.

"These delays are undermining industry confidence with the result that no one is investing," he will tell delegates - including the Energy minister, Mike O'Brien - at a conference sponsored by the Amicus trade union.

"It is not yet too late, but the Government must act fast to set out the ground rules for the ongoing running of our fossil fuel plant. Otherwise, over the next few years, we will see Britain's capacity margin dwindle to a level where security of supply is in real jeopardy."

Derek Simpson, the general secretary of Amicus - Britain's largest energy union, representing a quarter of all power workers - will say that the country faces "controlled power cuts" from 2008 when the next phases of legislation on sulphur and carbon dioxide emissions kick in.

The extra cost of the legislation - the toughest in Europe - could make coal and gas power stations uneconomic to run. Large energy groups could decide to quit the UK, leaving the running of power stations to "cartels" manipulating electricity prices, he will warn.

Mr Simpson will call on the Government to support a new nuclear construction programme, after the decommissioning of Britain's nuclear reactors starts in 2008, by promising to meet some of the industry's future decommissioning liabilities.

But Mr O'Brien told The Independent on Sunday that no financial packages were on the table to support any such programme. "We are not going to write anyone a blank cheque," he said.

Mr O'Brien added that no date had been set for the much- anticipated energy White Paper. It is expected to appear after the general election.

Editorial Notes: Original title: "UK faces power cuts within three years, warn energy companies"-LJ

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