UK energy gap may cost over $ 204 bn a year

LONDON, Nov 21: More than 100 billion pounds a year could be lost from the British economy within a decade as rising demand for energy far outstrips supply, according to a study by consultants LogicaCMG.

The report, issued today, warned that energy consumption could exceed supply by 23 per cent at peak times as early as 2015, hitting British homes and businesses harder and faster than predicted in the government's Energy Review published earlier this year.

''Action needs to be taken now to reduce the energy gap,'' LogicaCMG's energy director, Kieron Brennan, said in a statement.

''We all need to use energy more efficiently and the Government will have to take steps to resolve this issue. If this doesn't happen, it is almost certain that the power will go off and businesses will lose money.'' LogicaCMG said over 108 billion pounds (204.7 billion dollars) a year could be wiped off Britain's gross domestic product each year from 2015, or 3,700 pounds for every working adult in the country.

Energy intensive industries could face costs totalling almost 8 billion pounds a year in lost production by 2010, the report said.

The report also warned that longer, hotter summers would likely further strain supplies as electricity use for cooling rose, meaning power cuts would no longer be just a winter worry.

Building new nuclear power plants, as recommended by the Energy Review, would not solve the problem because they could not be built quickly enough, the company said.

REUTERS