Consumers to pay for greener energy ambitions

In the first annual energy statement to the Commons, Mr Huhne set out plans to secure the UK energy supplies and cut carbon emissions while "keeping the lights on".

According to the analysis published yesterday, the extra cost of energy and climate change policies is set to add 13 to the average household energy bill by 2020.

While efforts to cut carbon could lead to an 18 per cent increase in gas prices and a 33 per cent rise in electricity prices by the end of the decade, efforts to increase small-scale renewables on people's homes and make them more energy-efficient will lead to an overall 1 per cent increase in bills.

The Department of Energy and Climate Change also published a series of "pathways" for how the energy system might look in 2050, outlining the scale of the challenge of meeting the legally-binding target to cut emissions by 80 per cent by mid century.

Mr Huhne said he was laying out "a clear strategy for creating the 21st century energy system that this country urgently needs for an affordable, secure, low-carbon future".

The 32 measures include efforts to speed up the roll-out of smart meters, provide incentives for heat produced from renewable sources, and bring in emissions performance standards for power plants to make them cut their greenhouse gases.

Other steps aim to speed up connection of offshore wind farms to the grid, remove obstacles to private investment in new nuclear power and prop up the carbon price polluters have to pay for their emissions to encourage the development of low-carbon alternatives.

The move was welcomed by coal-powered plant Drax, which is based near Selby.

Earlier this month, Drax unveiled a vision for completely coal-free generation, by burning larger amounts of biomass.

A spokesman said: "We welcome the recognition, by the Government, of the importance of biomass to meeting the UK's renewable energy target. Drax has long believed that biomass could and should make a significant contribution to both reducing carbon emissions and increasing electricity generation from renewables."