Government insists it is tackling potential energy crunch

Energy and Climate Change Secretary Ed Miliband has responded to today's warning from Ofgem that energy prices could rise by as much as 60 per cent over the next decade, insisting that the government is already acting to protect the UK from anticipated price volatility and increased in ternational competition for oil and gas supplies.

"The most important thing about Ofgem's report is that it emphasises the need to - as we are doing - get on with new nuclear power, new renewables, including wind which is unpopular with some people, and clean coal," he said. "And we are doing all of those things."

In a thinly veiled swipe at the Conservatives, who made the rolling back of the state the central theme of their Party conference this week, Miliband argued that greater government intervention would be needed to deliver cuts in carbon emissions and better protect the UIK against energy insecurity.

"For example we have plans to introduce a levy on household bills which will help pay for clean coal power stations," he said. "That’s a hard thing to do and it is going to cost people money but is necessary to ensure the technology moves forward. That is an intervention by Government. If we leave it to the market we won't build clean coal."

The Department of Energy and Climate Change welcomed the Ofgem report, which warned that the need to invest in low carbon technologies coupled with increased global demand for oil and gas supplies meant that domestic energy prices will rise by between 14 and 25 per cent by 2020 with potential price spikes of 60 per cent.

It added that report endorsed the government's view that "there's no low cost high carbon future", and underlined the need for increased investment in low carbon technologies.

"We're already seeing the benefit of putting extra incentives behind renew ables, we have two new nuclear operators gearing up to invest because of our work to remove unnecessary hurdles and our proposed framework for clean coal is one of the most advanced," said a spokesman for the Department. "The public should be assured the UK energy system is resilient and will deliver for the long term."