Ed Davey, the energy minister, has said that if the government don’t allocate more money to energy spending within a decade there would likely be periods of blackout in the UK. It is expected that in the next few years energy bills are going to increase significantly in order to fund new wind farms and nuclear power plants that the government have planned.
Mr Davey has said that the energy infrastructure in the UK is going to face an increasing demand which it is going to be unable to satisfy in the next few years. In order to meet the financial targets people are going to have to pay more for energy.
It is estimated that the government are going to need to encourage over £100 billion of investment in the sector in order to keep energy provisions reliable in the UK. Unfortunately, unless energy firms are sure of making profit on investments, they are not going to make them. This means that various cleaner types of energy such as nuclear power or wind farms, are unlikely to be developed as they are expensive.
Currently energy firms are concerned that they will invest a large amount of money in these projects only for them to become unprofitable if the price of gas or oil drops significantly. This would mean that they are stuck producing expensive power while rivals will be able to utilise cheaper forms of energy and force them to lower their prices and potentially make a loss.
Critics of the government’s plan to increase spending have said that the only reason the money is needed is because coal and other forms of dirtier power have been made expensive because of carbon taxes. If these carbon taxes were not there, then energy would be more affordable, although this would of course have negative effects on the environment.