“Our supplies of cheap North Sea gas are running out. We now import half of our gas needs. By 2020, this will rise to around 80%. And growing demand for gas is driving up prices – British Gas says it’s paying around 13% more for wholesale gas compared with last year.”
Another problem is that we’ve underinvested in power infrastructure, says Phil. A lack of gas storage means we can’t take advantage of cheap buying periods, while a string of power stations are likely to be turned off between now and 2015.
Even when we have been spending, we’ve splashed the cash badly. “We’ve been flinging up wind farms in the hope of getting 15% of our electricity from renewable sources by 2020. But wind power is both expensive and unreliable. An offshore wind farm might generate power 40% of the time. Modern nuclear and gas stations can run 80-90% of the time.”
Visto en MoneyWeek.