The warning from Prospect comes after Centrica informed staff that it intends to cut up to 100 of the 285 jobs in its power station business through the closure of King’s Lynn and Barry power stations – with the loss of 60 jobs – plus additional cuts in support functions such as finance and engineering.

The closures come at a time when the company is also looking to restrict operations at three further stations (Peterborough, Brigg near Scunthorpe and Roosecote near Barrow) thereby removing key peaking plant which is essential to maintain security of supply when renewable and nuclear output drops.

Prospect negotiator Mike Macdonald said: “The structure of the energy markets means at present there is little financial incentive for Centrica to operate its gas-fired plant. But with the closure of several large coal-fired power stations between now and the end of 2015 there is a good chance demand will outstrip supply, leaving Britain facing significant price increases at a time when electricity prices have already reached record highs.”

The closure of Kings Lynn and Barry will also result in the loss of opportunities for skilled employment in areas that need more high technology jobs not less, and have knock-on consequences in a range of supply industries as well as for school-leavers and graduates, Macdonald said.

“Due to the ineffective structure of the market, our members will lose their jobs, the country will lose valuable technical skills and, from 2015, prices will rise to even higher levels, hurting domestic consumers and hard-pressed energy-intensive industries as power stations close and peaking plant becomes vital.

“We believe that rewarding operators more effectively for running peaking plant would offer better value for hard-hit consumers. We hope that DECC and Centrica will consider alternatives that retain skills and technological expertise in areas hit by economic contraction.”