Chris Huhne, the Energy Secretary, will outline government plans today to encourage energy companies to develop low-carbon power plants, including nuclear power stations and wind farms.

Energy analysts say the Coalition’s plans will put Britain on course for a “high cost, low carbon” electricity market where consumers pay the price for environmentally friendly generating technology.

Energy companies say that the shift will require them to invest more than £200 billion in new power stations and networks over the next 20 years.

A new tax could be levied on fossil fuels such as coal and gas, making them more expensive relative to low-carbon sources of energy such as nuclear and wind power.

Mr Huhne will tell MPs that the reforms will wean Britain off imported gas, and curb inevitable price rises, meaning household bills will ultimately be lower than they would have been otherwise.

Writing in the Business section of The Daily Telegraph today, Mr Huhne hails his plans as the most far-reaching reform of the electricity market since privatisation in the 1980s.

"These reforms can unlock private investment on an unprecedented scale, and ensure that we undergo the low-carbon electricity revolution at the lowest possible cost to consumers," he writes.

David Porter, chief executive of the Association of Electricity Producers, said ministers and companies needed to be honest and admit that the shift towards low-carbon generation would cost households more.

"The huge cost of doing this will push up customers' bills. Everyone involved has to be candid about that," Mr Porter said. "Companies have got to invest a lot of money and that will find its way to people's bills, although every effort will be made to minimise that."

According to the website Energyhelpline.com, the average household is facing record winter fuel bills of around £630 because of recent energy price rises and the early arrival of winter.

Low income families were dealt another blow when heating grants were suspended. The £345 million budget has been quickly eaten up because of the cold snap.

Under European Union targets, Britain is obliged to increase the share of energy from renewable sources from 3 per cent to 15 per cent.Today, Mr Huhne will signal moves towards taxing energy firms on the carbon dioxide they emit by burning fossil fuels such as coal and gas. Creating a "floor price" for carbon is intended to assure investors that costly new nuclear power stations – which produce little carbon – will be profitable over the coming decades. But energy companies are likely to pass on the increased cost of carbon to customers.

"The Government and the industry will want to be sure that bills don't rise by any more than they have to, so the cost-effectiveness of whatever changes are made will be vitally important," Mr Porter said.

He added that consumers will not easily accept Mr Huhne's argument that his measures will mean price rises are smaller than might otherwise have been the case. He said: “That’s going to be a very hard sell, because for many consumers, all they are going to notice is that their bills are going up.”

To encourage investors to put money into wind and wave farms, Mr Huhne will announce a guaranteed price for electricity.

He will also announce a “capacity payment” to generators, giving them money for maintaining power stations that are not generating electricity. The measure is meant to ensure back-up generating capacity to deal with surges in demand like the recent cold snap.

Many of Mr Huhne’s fellow Lib Dems oppose nuclear power and he has insisted that there will be “no specific subsidy” for new nuclear plants, which each cost around £4 billion to build.

But the carbon price may be seen as a disguised subsidy for existing nuclear plants, since it will allow their owners to sell electricity much more cheaply than power produced by fossil fuel plants.

The Department of Energy and Climate Change said last night that electricity prices would rise, but insisted that the Coalition plans would deliver the best deal for consumers.

A spokesman said: “If we don’t reform the market now we’ll all pay more than we need to in the long run, and risk not having the low carbon and secure supply we need.”