Energy crisis pushing firms to brink, CBI warns

Mar 15 2006 by Nic Paton Print This Article

British businesses are being hit hard by the spiralling cost of energy, and some could even be forced to shut down, industrialists have warned.

Sir Digby Jones, director-general of the Confederation of British Industry has warned that UK energy supplies are "seriously overstretched".

Yesterday the National Grid asked industrial users to limit their usage after it emerged that UK wholesale gas prices had risen by 23 per cent.

It also warned it could have to cut off supplies in some cases if the situation got any worse.

Sir Digby said: "We have got away with it so far, but surely the energy policy of a major economy should not rely on 'getting away with it'. With more cold weather forecast the energy crunch is now with us."

Rising energy costs were increasingly eating into the ability of companies to compete.

"With prices this high, some heavily energy-dependent firms could be forced to turn down or shut down production," said Sir Digby.

"Germany is reported to have enough gas in reserve to supply its needs for 75 days, and France 66 days. Although the UK has some indigenous reserves in the North Sea, our storage barely stretches into double digits.

"It is painfully clear that as we become a net importer of gas we need substantially more capacity to meet our needs Ė yet the planning system is standing in the way of getting the necessary facilities in place," he added.

But trade secretary Alan Johnson insisted to the House of Commons yesterday that supplies to domestic customers or the vast majority of commercial and industrial supply were not threatened by the present situation.