'Double squeeze' to crush Britain in energy vice

Britain should brace for a "double squeeze" which will send households' energy bills soaring, industry regulator Ofgem warned today.

Its head Alistair Buchanan warned of a "rollercoaster" ride over the next five years as coal and oil-fired power stations shut down and no new energy sources are brought online.

That will leave Britain even more reliant on imported gas - amid a bare-knuckle fight for supplies on the global market.

Mr Buchanan said: "If you can imagine a ride on a rollercoaster at a fairground, then this winter we are at the top of the circuit and we head downhill - fast.

"Within three years we will see reserve margin of generation fall from below 14 per cent to below 5 per cent. That is uncomfortably tight."

Meanwhile, "there is no new nuclear, no new clean coal, no new carbon capture this side of 2020.

"So we will lean on gas, and gas will account for about 60 per cent of our power station needs instead of 30 per cent today.

"Just at the time we're tight on power stations, the world is going to go tight on LNG (liquefied natural gas) gas prices, so you have got a double squeeze," he said.

The National Union of Mineworkers (NUM) pointed out it had warned for years of the danger of gambling Britain's energy security at the global casino.

General secretary Chris Kitchen said Britain had enough domestic coal reserves to remain self-sufficient for up to 100 years, while refining renewable technologies in the meantime.

But Con-Dem enthusiasm for shale gas "fracking" had "led us up the garden path."

"It's a return to rip-off Britain. Our government in collusion with multinational companies will sell us down the river," said Mr Kitchen.

He said the NUM would continue to demand a renationalised energy industry.

A Department of Energy and Climate Change spokesman said the government's Energy Bill and gas generation strategy "are aimed at plugging this gap in order to keep the lights on."

The Bill will introduce a "capacity market" to pay energy firms for guaranteed supplies and "contracts for difference" to prop up revenues for low-carbon energy.

But the NUM said the contracts rewarded gas suppliers with some of the cushiest deals of all.

Friends of the Earth's Guy Shrubsole said the government's "dash for gas" would only make matters worse.

Mr Shrubsole insisted ministers should end Britain's reliance on fossil fuels entirely, demanding a "clean power target" to foster growth in renewables.

Meanwhile, Ofgem and the Financial Services Authority continue to investigate alleged price-fixing in the wholesale gas trade.

The allegations stem from wild swings in the wholesale market last year, where trades repeatedly dropped well below market rates between 4 and 4.30pm - the period when agencies calculated the "day ahead" price, affecting millions of pounds in long-term contracts.