Britain is running out of renewable energy as a surge in demand from businesses has outstripped electricity by wind farms, hydropower and waste gas burning.

Interest in cutting carbon has far exceeded new supplies of zero-carbon power - creating a potential headache for companies which have pledged to become 'carbon neutral'.

The issue has been seized on as evidence of the serious problem of new renewable energy schemes being held up by planners, even though the government is this week expected to announce measures aimed at delivering a huge expansion of offshore wind power, which is less constrained by planning problems.

Gaynor Hartnell, deputy director of the Renewable Energy Association (REA), said the increase in demand was being led by large companies which have to pay the climate change levy on electricity from fossil fuels. 'We have got 4 per cent of electricity provided by renewables and the business sector is much larger than that, so not surprisingly supply is being swamped by that demand,' she said.

A survey of 3,500 big energy users by Datamonitor earlier this year estimated that business demand was nearly three times UK supply. At least three electricity suppliers told The Observer they were turning away or putting limits on new customers. EDF said it was 'prioritising' existing customers. Npower said the amount it could supply depended on how much customers could pay. Good Energy, a renewable-only electricity supplier, said it was turning away very big orders.

'Put simply, there isn't enough capacity to satisfy demand,' said David Titterton, head of marketing for Npower business.


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