Scotland – ENERGY is one talking point Labour is hoping will not rear its head during the next couple of weeks. A full-blown power failure would be a disaster for the government’s credibility – and with it the chances of an historic third term.

Like the MG Rover debacle, blackouts similar to those in the United States, Italy and the UK two years ago would be yet another example of complacency by this government. It might be why we are heading for the ballots in May; having negotiated the winter months, a spring election should make it easy to keep the lights on.

However, a report just out from PricewaterhouseCoopers (PwC) says we are about to be plunged into darkness again – and not just in the UK. Worldwide, populations are suffering from poor levels of energy investment and ageing power plants. The research calculates that about $12.7 trillion (£6.7tn) of investment, greater than the entire US annual economic output, is understood to be needed globally to meet an expected doubling in electricity consumption through 2030. That total raises the bar above the estimated $10tn electricity spend agreed by the International Energy Agency (IEA) for the same period.

“Blackouts are expected to become more frequent,” the report damningly concludes. “Two-thirds of utility respondents believe the likelihood of blackouts will increase or remain the same, while only a quarter think it will reduce.” The findings are based on a survey of 119 investors and utilities executives in 36 countries.

Failures of power cables in upstate New York, London and northern Italy left millions of people, offices and subway systems without power in 2003. Despite the warning, power-plant development has since failed to keep up with rising demand, meaning countries like the Netherlands and Italy have to rely on imports. The UK is becoming a net importer of gas this year.

Security of supply – safely transporting power from source to home – is a “major concern” for 72 per cent of the utility executives, up from 65 per cent last year. This becomes a greater issue when gas is forced to travel long distances, particularly from politically sensitive nations such as Iraq and Russia. In fairness, it is understood that if Labour wins the election, Tony Blair will announce a radical change in policy. Energy minister Mike O’Brien is believed to have been given a simple remit on his appointment last year: keep the lights on until after the general election.

Funds will be needed to build new gas import terminals in the UK, as reserves in the North Sea dwindle. Mark Hughes, director of European utilities at PwC, believes the UK will import about 70 per cent of the gas it needs within five years.

Then there is the thorny question of nuclear power. More than half of the respondents to the PwC survey said they expect the introduction of new nuclear power stations – even with popular and political opposition – because countries need to replace ageing reactors.

Rising investment in renewable sources, especially wind farms, isn’t expected to deliver enough power to replace output from thermal or nuclear stations, currently at about 23 per cent of UK electricity. The survey said its participants “expect the share of renewables to remain virtually the same in the next ten years” – meaning the government will miss its targets.

In the UK, it is hoped renewable sources are expected to generate about 10 per cent of the country’s electricity by 2010 and 20 per cent in 2020, up from about 5 per cent now. That will not happen if the PwC research proves accurate.

Nuclear power stations are further supported by the commitment to cut carbon emissions under the Kyoto Protocol. Nuclear plants do not emit carbon dioxide.

North America is the most vulnerable region to blackouts, and will need about $3.4tn of investment by 2030, more than any other territory, because it is also the biggest energy consumer. Europe will need about $1.9tn of the total worldwide investment by 2030 because some of the continent’s wires, including those in the UK, are at the end of their 40-year life.

And the sky-rocketing market in China will need about $2.4tn of investment in power and gas assets, the PwC report reveals, in order to feed its growth in demand.

In Spain, gas-fired power stations and gas import terminals are being built as power demand is forecast to grow by 5.6 per cent this year, above the European average. The country currently suffers frequent supply cuts.

European power and gas mergers are expected to stay at the same level as last year, where they represented about 40 per cent of a worldwide M&A total of $123 billion, Hughes said.

More takeovers are likely in Eastern Europe, where companies such as Germany’s E.ON and RWE or Belgium’s Electrabel are expanding.

“An eastern focus beckons with European companies becoming further engaged with south-eastern Europe, Russia and former Soviet Union countries both in their hunt for gas and to build their presence in reforming markets,” according to the report.

Eastern European countries such as Poland and Bulgaria are selling stakes in some of their state-owned power plants. Dusseldorf-based E.ON plans to increase its stake in Slovak power company Zapadoslovenska Energetika.

“Companies are continuing to move out of their home territories in their pursuit of scale, but the main focus is on their wider local regions rather than pursuing a globally stretched footprint,” the report says.

About 83 per cent of European utility respondents said they planned to stay focused on their “home regions”, the report said. Electricité de France, the world’s largest power company, has sold some of its assets in Asia as it plans to focus on Europe.

Meanwhile, Hughes said mergers between bigger Western European companies are unlikely because of regulatory hurdles. There is much work for the UK government to do – even if the lights stay on for now.