WITHIN a decade an energy shortage could lead to power cuts that cost British business over pounds 108bn a year as demand exceeds supply by up to 23pc at peak times, according to a study by LogicaCMG.

Potential solutions such as new nuclear power stations will not be ready within 10 years to close the gap. The LogicaCMG study suggests the gap will widen much faster than forecast in the Government's Energy Review over the summer which suggested demand for energy could exceed supply by 30pc by 2025.

It suggests that energy intensive industries could be required to shut down operations at peak usage periods, with an immediate cost to businesses of pounds 7.9bn a year. And it will not just be in the winter months that industry is effected. If the effects of climate change continue, longer hotter summers will mean more air conditioning and cooling systems, LogicaGMG says.