In an open letter to the Government that was published in The Times last week, business leaders called for a “clear and stable energy policy”.

The letter — signed by the heads of the CBI, GE, Tata Steel, Scottish Power and BOC among others — said that the UK needs to adopt “a long-term framework, so that companies can plan for construction projects that will last into the next decade”.

It also said that the Government must “invest in the capacity of UK supply chains to build on our expertise in existing and future technologies, from offshore wind to carbon capture and storage”.

To ensure that the shift to more-intermittent renewable energy does not affect security of supply for homes and businesses, the business leaders said: “The UK needs to look at how we use technologies to help store electricity and manage peak-time demand, while supporting the development of new gas and nuclear capacity to help underpin our power grid”.

The Government responded by saying: “We are taking long-term decisions to tackle a legacy of under-investment, build a system of energy infrastructure fit for the 21st century and create the right environment for business to invest in clean, affordable and secure energy. However, we do not apologise for doing this at the same time as working to keep bills as low as possible and making sure that the people who foot the bill — the hard-working families and businesses of Britain — get a good deal.”

On the day the letter was published, a new report from the Institution of Mechanical Engineers (ImechE) (www.imeche.org) claimed that the UK will face “an unprecedented energy gap” in 10 years’ time.

According to the IMechE’s head of energy and environment, Jenifer Baxter, new policies to stop unabated coal-fired power generation by 2025 and the phasing out of ageing nuclear reactors — without plans in place to build a new fleet of gas-fired power stations — will combine to create “a supply crunch”. Ms Baxter said: “Under current Government policy, it is almost impossible for UK electricity demand to be met by 2025”.

As many as 30 new gas-fired power stations are likely to be needed to make up the supply deficit, according to the report, but these are not being built.

Reforms to the electricity market brought in under the last Government are also not helping to encourage construction, it claimed.

The report says that attempts to encourage energy efficiency, such as the now-defunct Green Deal to insulate houses, have not been enough. In addition, the report points out that the Government has cut subsidies for onshore wind and solar power; it has also decided to abandon plans to develop carbon-capture and storage technology.

Ms Baxter warned: “The UK is facing an electricity supply crisis. As the population rises — and with greater use of electricity in transport and heating — it looks almost certain that electricity demand is going to rise.

“However, with little or no focus on reducing electricity demand, the retirement of most of the country’s ageing nuclear fleet, recent proposals to phase out coal-fired power by 2025 and the cut in renewable-energy subsidies, the UK is on course to produce even less electricity than it does at the moment.

“We have neither the time, the resources or enough people with the right skills to build sufficient power plants. Electricity imports will put the UK’s electricity supply at the mercy of the markets, weather and politics of other countries, making electricity less secure and less affordable.”

The supply gap could be equivalent to 40-55% of electricity demand by the middle of the next decade, according to the study. The IMechE advises a greater focus on shale gas exploration in the UK, more help for industry to reduce its demand for electricity and more investment in R&D.