Families will have to pay more for their electricity to fund the development of nuclear and renewable energy, under changes set out in a draft Energy Bill.
The Government is depending on nuclear power as part of its long-term energy strategy and attempts to slash carbon emissions.
It needs to increase domestic energy capacity to cut Britain's dependence on imported gas and fossil fuels such as coal.
Under the plans , long-term contracts paying a steady rate of return for energy over the lifetime of new low-carbon generators would be introduced.
An emissions performance standard to prevent construction of new coal plants which produce too much carbon dioxide is also in the Bill.
The measures are aimed at encouraging investment and countering the high capital cost of building nuclear power plants and wind farms.
They are set to increase consumer bills, although the Government argues the rises will be less than if the UK carries on without reforms.
Critics have warned the plans amount to a subsidy for new nuclear reactors, although this is denied by the Government which has ruled out such a move.
Energy Secretary Ed Davey says it is vital for Britain to start producing more of its own energy and that £110bn in investment is needed over the next decade.
"Leaving the electricity market as it is would not be in the national interest. If we don't secure investment in our energy infrastructure, we could see the lights going out, consumers hit by spiralling energy prices and dangerous climate change," he said.
"These reforms will ensure we can keep the lights on, bills down and the air clean. The reforms will also be better for the economy, leaving us less vulnerable to rising global energy prices and supporting as many as 250,000 jobs in the energy sector.
"By reforming the market, we can ensure security of supply for the long-term, reduce the volatility of energy bills by reducing our reliance on imported gas and oil, and meet our climate change goals by largely decarbonising the power sector during the 2030s."
The Department of Energy and Climate Change estimates the average bill will increase by £160 by 2030 instead of the £200 rise predicted if the market is left as it is.
The changes come as it emerged electricity giant EDF is in talks with the regulator about extending the life of its existing nuclear power stations.
Attempts to create a "nuclear renaissance" faltered recently when two of the "Big Six" energy firms pulled out of building two new reactors.