Critics have hit out at the draft bill saying it is designed to stimulate major investment in clean energy generation, resulting in higher consumer bills.
The bill is expected to outline long-term contracts to encourage investment in nuclear and renewable energy. Energy Secretary Ed Davey countered these measures did not amount to public subsidies for new nuclear plants. He continued that bills would be even higher if the new measures were not introduced.
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The government needs to increase energy capacity to compensate for the closure of a number of coal and nuclear plants, and to reduce the UK's reliance on imported gas.
"We need to make sure the bias towards gas is dealt with... and that low carbon sources can compete on a level playing field," Mr Davey said.
"There will be no blank cheque for nuclear - unless they are price competitive, nuclear projects will not go ahead."
State subsidies for nuclear plants are illegal in the European Union, and guaranteed contracts for energy suppliers are seen by some as a way around these laws.
Mr Davey conceded that energy bills may increase as a result of these contracts, but said bills would rise even more without them due to the rising cost of imported wholesale gas. Producing our own energy, Mr Davey said, would help to keep prices down.
The government will also introduce an Emissions Performance Standard, designed to prevent the construction of new, dirty coal plants.
The draft energy bill will be scrutinised by parliament before appearing as a fully-fledged bill in the autumn.
(HMc)
