The UK government has confirmed that it will overhaul the electricity market in a bid to facilitate large-scale investment in low-carbon generation and secure affordable energy supply, after a new Energy Bill was included in the Queen's Speech.
The UK is set to invest £110bn in revamping its electricity generation infrastructure as part of the proposed reforms.
The Energy Bill will reform the electricity market to introduce long-term contracts that pay a steady rate of return for energy over the lifetime of new low-carbon generators.
The Government also claims the move will reduce expected rises in energy bills by around £40 by 2030.
Electricity and gas utility company, National Grid, has welcomed the announcement that the Energy Bill will be brought before parliament during the 2012-13 session.
Executive director Nick Winser said: "There is a lot of work to do to ensure we are ready to deliver these mechanisms and we remain committed to playing our part and working closely with DECC, the energy industry and other stakeholders to ensure they are delivered on time."
Climate Group CEO Mark Kenber also responded to the announcement and said it is a positive step after two years of 'lack of direction' on the environment and the low-carbon economy.
"The world's low-carbon energy market is expected to triple to almost £1.4t by 2020," said Kenber.
"We cannot afford any more delays in kick-starting the much-vaunted green investment programme without running the danger of leaving the UK lagging further behind in the global market place."
Greenpeace believes that the Energy Bill could save consumers money, unlike previous energy bills announced in the past.
Jim Footner, head of Greenpeace's climate and energy campaign, said: "People normally dread energy bills, which have been soaring due to rocketing gas prices. But the Energy Bill announced today by the Queen could actually save people money.
"It can do this by taking the side of the bill-payer, and not the side of energy companies like Centrica, who want us to fork out for expensive gas imports and nuclear energy. Our household budgets just can't afford a new dash for imported gas nor for nuclear reactors which are going to cost at least £7bn each."