Britain is heading for a homegrown energy crisis, according to a sobering article in the Economist magazine (How long till the lights go out, 7 August).

The piece describes how the country’s existing ‘hotch-potch’ of energy sources will not be able to cope when economic growth resumes.

It paints a bleak picture: North Sea gas is running out; nuclear power stations are being shut and not replaced fast enough; coal is too dirty for the 21st century; renewable resources like wind and waves are not yet up to the job.

Unless radical action is taken the predicted energy shortfall will have to be met from imported gas, a large chunk of it coming from (or via) unpredictable countries, such as Russia.

Complicated by global risks to do with economic, geopolitical and climate change issues, future energy security risk is incredibly hard for politicians to manage. But the Economist has two suggestions that may help prevent blackouts.

First, infrastructure: companies must be persuaded to build more gas storage so that the impact of price rises and supply interruptions can be softened. More cross Channel electricity supply cables to facilitate a Europe-wide power grid would help security as well.

Second, carbon must be taxed to encourage companies to invest in long-term, expensive, technology-heavy projects such as nuclear plants, cleaning up coal and tapping renewable sources of power.

Tags: Energy, Energy security

This entry was posted by Garry Booth on Tuesday, August 11th, 2009 at 3:33 pm and is filed under Insurance Commentary.