By Paul Dobson
Dec. 12 (Bloomberg) -- The U.K. government must step in to ensure utilities build required energy infrastructure because trusting the companies to do it themselves may leave the country with inadequate power and gas assets, a group of lawmakers said.
“A simple trust in the market’s ability to deliver without any intervention will see us facing an ‘energy crunch’ in the medium term,” the parliamentary Business and Enterprise Committee said in a report published today. The cross-party group provides recommendations to the government.
Britain needs to take urgent action to ensure investment in storage facilities for natural gas and in power plants, particularly as the economic slowdown may deter spending, the committee said.
Across Europe, intervention is increasing to help energy consumers pay bills or to boost tax revenue. Italy plans to limit power prices to reduce the impact of a recession, while France, Poland, Russia, Slovakia and Spain are all studying the prices utilities charge consumers. Ed Miliband, the U.K.’s energy and climate-change secretary, said Dec. 9 there needs to be a “strategic role for government” in energy policy.
In the “long term,” the “era of cheap energy” is over and the government must consider whether it’s the responsibility of the utilities to deliver social-policy objectives, the committee said. At the same time, retailers need to cut prices for consumers as soon as possible next year, it said.
Britain’s biggest energy supplier is Centrica Plc, followed by Scottish & Southern Energy Plc. E.ON AG, RWE AG, Electricite de France SA and Iberdrola SA make up the six biggest energy providers in the U.K.
“It is time to stop bashing the electricity industry and to encourage the investment that we need,” the U.K. Association of Electricity Producers said in an e-mail. It’s important when determining investment “that the industry should be profitable.”
To contact the reporter on this story: Paul Dobson in London at pdobson2@bloomberg.net
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