UPDATE 1-OFGEM warns of dwindling UK power capacity

(Updates throughout)

LONDON, Oct 5 (Reuters) - Britian faces a potential shortfall in electricity generation in the next three to four years, its power regulator said in a report on Friday.

Spare generation capacity in the system, called the margin, could fall to 4 percent by 2015/2016 from 14 percent today Ofgem said.

Ofgem's Chief Executive, Alistair Buchanan said Britain's energy industry faces "unprecedented challenges...to attract the investment to deliver secure, sustainable and affordable energy supplies for consumers."

The decline in generation capacity is largely due to the closure of coal and oil-fired plants under the EU legislation aimed at limiting the amount of greenhouse gases emitted in the bloc.

(Reporting By Susanna Twidale)

((susanna.twidale@thomsonreuters.com)(+44)(0)(207 5424753))