Household energy bills could soar by as much as 60 per cent because Britain faces a bill of up to £200 billion bill to restore crumbling power plants and secure future supplies, Ofgem, the energy regulator, warned today.

Bills, certain to rise by at least 14 per cent, could spike as early as 2016 under a worst-case scenario laid out by the regulator.

Huge investment is required to fund the Herculean task of developing a reliable energy infrastructure and meeting stringent climate change targets, Ofgem said.

In the most comprehensive review of Britain's energy supplies carried out by the regulator, Ofgem called on industry to help meet the cost of developing reliable energy sources.

Consumers' gas and electricity supplies must be protected from an increasingly volatile global gas market, it said.

In its review, codenamed Project Discovery, the regulator looked at four energy scenarios for the next ten to 15 years: rapid economic recovery with Britain meeting its domestic renewables targets; slow economic recovery leading to more investment in the environmental sector; a strong global recovery with intense competition for energy; and a period of slow growth with low investment in gas and electricity.

In all four scenarios, Britain faces a number of serious risks to its energy security.

The country's rising dependence on gas imports leaves consumers vulnerable to price fluctuations in the global gas market or disruptions to supply.

Under the mildest scenario energy bills would increase by 14 per cent by 2020.

Alistair Buchanan, Ofgem's chief executive, said: "Britain faces a tough challenge in maintaining secure supplies while at the same time meeting its climate change targets.

However, there is still time to act."

The regulator would be putting forward proposals in the new year for energy companies to start addresssing the challenges, Mr Buchanan added.

"These are big challenges. Consumers are already enduring high energy prices," he said.

Wind power, the renewable energy source attracting the most investment at present, may be too variable to satisfy the habits of energy-hungry consumers, while bills are almost certain to increase, especially if oil and gas prices continue the underlying rise seen since 2003, the report said.

Several nuclear power plants are expected to close in the next few years while "a significant amount" of coal and oil-fired power stations are due for removal under European law by the end of 2015. Both developments are likely to lead to a large fall in electricity capacity.

As many European countries become increasingly dependent on gas imports, recent events such as the Russia-Ukraine crisis have raised concerns about the security and price of future gas supplies, the regulator said.

THE TIMES 09 SEPTEMBER 2009

Chris Kitchen NUM Secretary said, "This is the result of years of ignoring Britain's energy dilemma.  The NUM's well documented warnings over many years have been ignored.  The rundown of our coal industry and the refusal to re-generate it has left us without the energy security our nation needs.  We are now at the mercy of foreign importers of energy and it will be ordinary working people and their families who will now have to pay the price for the greatest planning folly of all time as energy companies simple pass on the increased costs.  Once again, even at this late stage we call on the government to realise that privatisation of coal has been a monumental disaster and re-nationalise our vast coal assets.  Rapid investment in clean coal technology is urgently required along with massive investment to exploit Britain's deep-mine coal reserves."