Consumers are being warned they face higher energy bills as the UK becomes more reliant on energy imports.

In a speech, Ofgem chief executive Alistair Buchanan will say that falls in Britain’s power production capacity are likely to lead to more energy imports and customers paying more.

The energy watchdog predicts power station closures could mean a 10% fall in capacity by April alone.

Mr Buchanan has said the UK needs more gas supplies to fill the shortfall.

His warning comes as older power stations close and renewable energy remains in its infancy.

Global market

Existing plans to take ageing and polluting power stations off the UK network over the next few years mean the amount of energy the UK can produce is set to fall.

The BBC’s John Moylan says that, while we have heard such warnings before, the difference with this one is that the process is already underway. Plants are already closing, and although planning permission for new ones has been agreed, nothing is actually being built.

While the shortfall in supply can be filled by increasing gas imports, competing for those supplies on the global market is likely to cost more.

Longer term solutions to the UK’s energy needs, such as new nuclear power stations or tapping domestic shale gas reserves, have yet to be given the final go-ahead by the government.

Writing in the Daily Telegraph ahead of his speech in London on Tuesday afternoon, Mr Buchanan points out that the imminent closure of ageing coal and oil power station make it vital to invest more in securing gas supplies.

He says that over the next three years, he expects to see the “reserve margin” of generation to dwindle from 14% to just 5%.

He writes: “If you can imagine a ride on a rollercoaster at a fairground, then this winter we are at the top of the circuit and we head downhill – fast.”

Mr Buchanan then adds: “The big worry about gas for all consumers is what price will we have to pay to get it.

“Because just when we need more gas, world demand for gas is set to rise while our own supplies are predicted to fall by another 25% by 2020.”

BBC, 19 February 2013 Last updated at 06:57

http://www.bbc.co.uk/news/business-21501878