Britain needs to reduce its emphasis on renewables and increase its investment in nuclear energy or risk a system "not fit for purpose" by 2030, according to the CBI.
A new report by consultants McKinsey, commissioned by the CBI, says failure to act could result in electricity prices for both industry and consumers rising 30pc by 2030.
It gives warning ahead of the Government's renewable energy strategy and White Paper on low-carbon economy, due to be published this week, that the current plans do not go far enough to maintain energy security, stop price volatility or hit climate change targets.
The study calls for the Government to change the energy mix within the next 12-15 months. Its suggestions include raising nuclear spend by £15bn and carbon capture by £7bn, while cutting investment in expensive gas projects by £11bn and wind by £12bn.
The Government's "overly ambitious" targets on renewable energy generation ought to be offset by nuclear, the report says, "which is likely to produce equivalent low carbon electricity for lower investment cost".
The business lobby group argues that this alternative path will lead to an 83pc reduction in carbon emissions compared with a projected drop under the Government's plans of just 64pc by 2030.
"This is last chance saloon stuff," said John Cridland, deputy director-general of the CBI. "It's all about things that need to be done within the next 12 to 15 months. Delay or risk of delay on energy is probably the biggest single concern business has got."
The CBI's recommended policy changes include tighter energy efficiency standards and incentives, such as an accelerated roll-out of smart meters; a lower renewable energy target for 2020 dropped from 32pc to 25pc; and accelerated investment in the energy grid.
"The CBI's report is a very good piece of work," said Steve Holliday, the National Grid chief executive. "There is no difference in the cost of implementing its model, but its carbon reduction is greater and there's a better energy mix."
The report comes as the Government prepares to say that £100bn must be spent on wind, solar and other alternatives by 2020. This ambitious projection follows an agreement by G8 nations to cut carbon dioxide emissions in each country by 80pc by 2050.
Research from Inenco, the UK's largest energy consultancy, today predicts that hitting these targets will cost the UK up to £1 trillion. "If you think about de-carbonising electricity generation, making all transport run in a low carbon way and ripping out all gas heating systems to replace them with alternatives, you're looking at a huge bill," said Ian Parrett, an energy analyst at Inenco.
It gives warning ahead of the Government's renewable energy strategy and White Paper on low-carbon economy, due to be published this week, that the current plans do not go far enough to maintain energy security, stop price volatility or hit climate change targets.
The study calls for the Government to change the energy mix within the next 12-15 months. Its suggestions include raising nuclear spend by £15bn and carbon capture by £7bn, while cutting investment in expensive gas projects by £11bn and wind by £12bn.
The Government's "overly ambitious" targets on renewable energy generation ought to be offset by nuclear, the report says, "which is likely to produce equivalent low carbon electricity for lower investment cost".
The business lobby group argues that this alternative path will lead to an 83pc reduction in carbon emissions compared with a projected drop under the Government's plans of just 64pc by 2030.
"This is last chance saloon stuff," said John Cridland, deputy director-general of the CBI. "It's all about things that need to be done within the next 12 to 15 months. Delay or risk of delay on energy is probably the biggest single concern business has got."
The CBI's recommended policy changes include tighter energy efficiency standards and incentives, such as an accelerated roll-out of smart meters; a lower renewable energy target for 2020 dropped from 32pc to 25pc; and accelerated investment in the energy grid.
"The CBI's report is a very good piece of work," said Steve Holliday, the National Grid chief executive. "There is no difference in the cost of implementing its model, but its carbon reduction is greater and there's a better energy mix."
The report comes as the Government prepares to say that £100bn must be spent on wind, solar and other alternatives by 2020. This ambitious projection follows an agreement by G8 nations to cut carbon dioxide emissions in each country by 80pc by 2050.
Research from Inenco, the UK's largest energy consultancy, today predicts that hitting these targets will cost the UK up to £1 trillion. "If you think about de-carbonising electricity generation, making all transport run in a low carbon way and ripping out all gas heating systems to replace them with alternatives, you're looking at a huge bill," said Ian Parrett, an energy analyst at Inenco.
Source: The Daily Telegraph
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