A spokesman for the Paper Federation said: "We agree with the findings of the report, and it’s quite obvious that there is inadequate capacity in the UK to meet target levels."
Government policy requires that UK power suppliers increase the amount of electricity they buy from renewable suppliers to 10% by 2010. However, the report said that planning delays coupled with lack of investment meant it was highly unlikely that enough plants would be built to meet initial targets.
The Paper Federation spokesman said he feared that any extra costs imposed on electricity suppliers could then be passed onto customers, such as the paper industry.
"At the moment there appears to be no clarity as to whether the supplier can unload these extra costs on to the customer or not," he said.
The extra costs imposed on suppliers were in theory fines for failing to meet green targets, said the spokesman, and therefore should not be passed on.
Power suppliers must obtain renewable obligation certificates to show they have met green power targets, and the report predicts that this could be as high as £60 per megawatt hour by 2006/2007.
"We have already had some examples of suppliers trying to add extra charges to their bills, knowing that they will not meet the 10% figure," said the spokesman.
He added that the Paper Federation does not want to see any more charges passed on to the "already burdened" industry customer.
Story by Andy Scott
