Europe's security of electricity supply is facing a growing threat, with generating capacity ahead of rising demand by the lowest ever level, according to a report published today.

The average margin between supply and demand fell to 4.8% last year, a percentage point below the previous year's, said consulting group, Cap Gemini. "This low power margin is a wake-up call to the energy industry, government and regulators that security of supply in Europe is now under severe pressure."

Britain is among countries that have done most to tackle the problem. It raised generating capacity by 13% to increase the margin by one percentage point. The margin this winter will be 22% compared with 21% last winter, according to UK figures.

Despite Britain's relatively strong position, industry experts underline the need for continued investment to replace coal fired plant that does not meet new European regulations and ageing nuclear reactors. "In this country we are looking at