Britain must invest between £95 and £200 billion in power plants and other infrastructure over the next decade to secure energy supplies and meet climate change targets, watchdogs said yesterday.

Energy regulator Ofgem said that the vast amounts, equivalent to investment of between €103 and €217 billion, would push domestic energy bills up sharply.

"The need for this investment arises at a time of volatile world energy prices and Britain's increasing dependence on gas imports," the watchdog body said in a report.

"Ofgem identifies the need for investment of up to £200 billion in power plant and other infrastructure over the next 10 years to secure both energy supplies and climate change targets."

Ofgem said the downside of such high investment would be a surge in domestic energy bills of between 14 and 25 per cent by 2020 compared with current levels. The worst case scenario could see bills shoot up 60 per cent by 2016 before falling back.

A Department of Energy and Climate Change spokesman said Ofgem was "prudent" to examine a range of hypothetical scenarios, "however unlikely they are."

He added in a statement: "What's clear... is that there's no low-cost high-carbon future.

"It's critical we maximise the effect of our planning reforms, clean energy rewards and efficiency measures to shift us away from fossil fuels and into a low-carbon mix."

There is growing interest around the world for new nuclear power plants, sparked by a desire by governments to reduce their dependence on oil, gas and coal.

Meanwhile, environmentalists welcomed a decision to postpone construction of a coal-fired power station in Britain, saying it was a victory for their opposition to new "clean coal" technology.

German energy giant E.ON blamed the global recession for its decision to delay investment plans for the plant at Kingsnorth in Kent, southeast England, by up to three years.

But green campaigners viewed the decision as a complete cancellation of the project, which as become the focus for protests and concerns over climate change and carbon dioxide emissions.

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