Generating capacity is falling, says Ofgem, and the risks of the lights going out is rising
The energy regulator is expected to warn later that the risks of power blackouts has increased.
In an updated assessment of the UK's electricity market, Ofgem will say that excess capacity has fallen.
It will heighten consumer groups' concerns that people could face higher energy bills in the coming years.
Ofgem has twice warned in recent months that the amount of spare power is shrinking, partly due to some gas generators being taken out of service.
Centrica has already withdrawn two of its gas plants from operation.
Plants mothballedIn April, SSE confirmed that it too would mothball gas plants and put off investments in new ones.
Many of the UK's gas plants are said to be operating at a loss, hit by falling power prices compared with the cost of gas.
Another factor that has crimped supply in recent months is European Union environmental legislation.
That saw around 10% of the UK's power capacity shut down in April.
Last October, Ofgem warned that the margin between the available electricity supply and demand could fall to as low as 4% by the middle of the decade.
Then in February, Alistair Buchanan, the chief executive of Ofgem, told the BBC that the situation had worsened, saying that "within three years it is going to get very tight".
The government's plan to ensure the lights stay on includes "capacity payments".
Capacity payments are designed to incentivise the building of new plants by guaranteeing investors take an agreed amount of electricity for an agreed price.
But the government has already come under fire over capacity payments from one of the big six suppliers.
"Government proposals for a capacity mechanism must pass the simple test of whether it keeps the lights on at the lowest cost to consumers," said Paul Masarra, the chief executive of Npower.
He added: "For me, that means a mechanism that treats all power plants in the same way, but that's not what the current proposals suggest."
'Higher prices'Npower wants the mechanism to extend to recently built power plants as well as proposed new installations.
But the plans worry consumer groups who fear they will result in higher household energy bills.
Adam Scorer, of the lobby group Consumer Futures, said: "Projections of ever-tighter capacity margins understandably raise fears of higher electricity prices.
"Government and regulator need to agree on the most realistic capacity scenarios, the least-cost ways of reducing demand and, where necessary, of incentivising new generation capacity."
More details of how these will work are expected later as part of a wider series of announcements by Energy Secretary Ed Davey, which will include publication of the British Geological Survey's report on shale resource in the north of England and the community benefits being offered for those who allow fracking locally.
Source: BBC News - Business http://www.bbc.co.uk/news/business-23069499#sa-ns_mchannel=rss&ns_source=PublicRSS20-sa
