The government has today reached an agreement on energy policy that energy and climate change secretary, Edward Davey, claims will deliver a clear, durable signal to investors.

Davey commented, “This is a durable agreement across the coalition against which companies can invest and support jobs and our economic recovery.

“The decisions we’ve reached are true to the coalition agreement, they mean we can introduce the Energy Bill next week and have essential electricity market reforms up and running by 2014 as planned.

“They will allow us to meet our legally binding carbon reduction and renewable energy obligations and will bring on the investment required to keep the lights on and bills affordable for consumers.”

However, Clare McNeil, IPPR senior research fellow, was more sceptical on the announcement, stating, “This announcement from Ed Davey goes some way to making sure Britain will keep the lights on, but leaves the door open for greater reliance on expensive gas.

“The Energy Bill will give investors and the market some of the assurances they have been craving, with a clear commitment to the UK achieving just under a third of its power from renewables by 2020. But 2020 is already in the rear mirror for many investors and businesses.

“The litmus test of this Energy Bill was a commitment to a 2030 decarbonisation target for the power sector and on this it has failed. Kicking this decision into the long grass and leaving the door open for changes to the UK’s fourth carbon budget and a ‘dash for gas’ will leave the government’s energy policy mired in exactly the kind of uncertainty it needs to avoid. Greater dependence on will only lead to higher and more volatile energy bills, at a time when government needs to be doing far more to keep these low.”