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As if Britain needed any more bad news. Last Friday, Ofgem, the country’s energy regulator, warned that investment of up to £200bn would be needed over the next 10 to 15 years to maintain reliable energy supplies in the UK while cutting carbon emissions. Consumers hoping the recent slump in gas prices would translate into a lasting drop in energy bills will be deeply disappointed.

One of Ofgem’s observations, in particular, is striking: “It is prudent to examine whether we can rely on the risk management actions of individual market participants to deliver wider objectives on security of energy supply.” Regulation must give a far stronger lead than in recent years, providing the oversight that the market requires, but also the predictability businesses crave in order to encourage investment.

A report released Monday by the Committee on Climate Change, an advisory body headed by Lord Turner, the UK’s all-purpose enarque, reaches similar conclusions from a different starting point. Britain’s greenhouse gas emissions fell by less than 1 per cent annually between 2003 and 2007. That pace must rise sharply if deeper long-term cuts are to be realised. Regulation may have to become more aggressive.

Falling demand during the recession has masked the scale of the challenge ahead. Without a policy lead, Britain risks increasing reliance on gas. But given falling gas production across Europe (excepting Norway) reliance on gas means reliance on Russia. Gas is often seen as “clean”, but if it is allowed to crowd out renewables it will make sustained cuts in carbon emissions harder to achieve.

In the long term, nuclear must be a big part of the answer, as both the government and the opposition Conservatives now acknowledge. It offers zero-carbon electricity at predictable prices from a scalable technology. But it is expensive, and the UK still has no long-term nuclear waste management plan. Still, nuclear power is a crucial part of any energy strategy.

This is not a solely British problem. In Germany, a new centre-right coalition opens the way for the life of current nuclear stations to be extended. Angela Merkel, the German chancellor, should support building new ones.

Weak, uncertain and changeable policy has allowed Britain to sleepwalk towards an energy crisis. Establishing a clear, predictable long-term framework for investment – with nuclear as a major component – is the only way to get out of it.

Copyright The Financial Times Limited 2017. All rights reserved.

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