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David Cameron has unveiled Conservative plans to impose a carbon tax on electricity generation, creating a clear incentive for long-tern investment in renewable energy.
Revealing plans to ensure that the lights stay on and homes keep warm in a future of uncertainty over energy supplies, the Conservative leader said it would reform an existing Climate Change Levy (CCL), imposing a levy instead on the carbon content of power production.
Utilities would only have to pay the levy if the European carbon price fell below the level of the levy, which would thereby act as a floor price for carbon emissions in Britain.
"A credible and sustainable price for carbon is vital if we are to see adequate and timely investment in new electricity generation," the party said in the report.
"Whatever the carbon content of electricity generated, operators considering new investments in plant with a life of several decades need to know where they stand.
"This is especially true for investments such as renewables and new nuclear power stations where the bulk of the lifetime costs are sunk in advance of generating any electricity at all."
The Conservative leader said energy policy was "out of date" and Labour had failed to modernise key infrastructure.
Cameron used a visit to a gas importation terminal in Kent to launch the party's Green Paper on energy security.
Described as "a programme for the long-overdue reform of British energy policy", the paper sets out plans to create a capacity guarantee in electricity and a gas supply security guarantee.
Other proposals include a Green Investment Bank that would aim to attract and package investment opportunities in energy.
"We are setting out a Conservative programme for the long-overdue reform of British energy policy," Cameron said.
"Together with the actions we will take to mobilise the investment required to enact those reforms and our strategy for minimising the cost to consumers".
Energy minister Lord Hunt condemned the Tories' "long overdue so-called policy statement", saying it amounted to "little more than a hotchpotch of tinkering with the energy market".
He added: "Rather than their shallow gestures, the government is acting with the industry to deliver stable long-term reform that will support a secure and fair route to a low-carbon future."
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