Alan Eastwood, head of competition and utilities at the Chemical Industries Association, said that yesterday’s outlook statement from National Grid Transco and Ofgem confirmed his members’ fears.

“It’s not hard to see that we might have to face some reponse from the demand side. We might well get a price effect (which would cause big users to stop production voluntarily) before we are required to switch off,” he said.

Last winter several members of the association were forced to stop production for about a week in February because of extremely high power prices.

Mr Eastwood said that forward prices for gas were so high at the moment that most of his members were staying out of the market. However, this would leave them fully exposed to the market price as the winter draws on. Prices for gas in the UK are also higher than those on mainland Europe, making it even harder for manufacturers to compete with their European rivals.

Jeremy Nicholson, director of the Energy Intensive Users Group, has said that there is a much greater risk of interruptions to the supply of industrial users this winter.

Mr Nicholson and the EEF, the manufacturers’ trade body, have told the Government that the absence of a long-term energy strategy is deterring major energy users from investing in the UK.

Michael Roberts, director of business environment at the CBI, told delegates at a seminar on energy held by General Electric on Tuesday that energy was the number one concern for CBI members.

“If there is an average winter the system should be able to cope. If there is a harsh winter, or a prolonged cold spell, then big customers may be asked to curb their demand,” Mr Brown said.

He said that the National Grid Transco report confirmed complaints of failings in the planning system. “The gas companies have been able to see for some time that supply would become tight and wanted to put in place new terminals and storage facilities. But the planning system has delayed the provision of those facilities,” he said.

“We need to make sure that we don’t put ourselves in this position in future where the planning systems are preventing the country from meeting its energy needs,” he said.

Many industrial customers have interruptible supply contracts for electricity, and similar contracts for gas are now being discussed.

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