Chris Huhne, the energy secretary, has warned that the government must act now and update the National Grid, or face the prospect of blackouts within eight years.
Over the next forty years, demand for power could double, Huhne predicted and the existing market will be unable to cope with the unprecedented challenges. 25% of power stations are due to shut down and in order to replace them we need £110 billion worth of investment.
Huhne made his comments at the unveiling of the Electricity Market Reform White Paper and pointed out that everything comes at a price and we need to pay if we want to generate clean, reliable electricity.
He went on to point out that even without the investment in infrastructure, fuel bills will still rise due to increased wholesale costs and the price of carbon. It is therefore imperative that we implement plans to deliver cost-effective investment because the current electricity market cannot keep up to speed with our needs.
Alex Salmond, the Scottish First minister, welcomed many of Huhne’s proposals saying reform of the electricity market can help to realise the potential for generating clean energy in Scotland and ensuring the UK has a secure supply of power in the future.
Scotland is currently at the fore in the development of carbon capture and storage technologies as well as renewable energy generation. The multi-billion pound investments required to update the national grid will create thousands of employment opportunities and reindustrialise Scotland, he added.
The prospect of increased fuel bills has prompted the FSB to call on the government to implement safeguards to protect small businesses from escalating energy costs.
Recent research by the Federation showed that 81% of small businesses and limited company contractors are already worried about rising energy costs. For a long time, the FSB has been saying that micro-firms should be treated the same as domestic users when it comes to power consumption.
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