Energy firms will be able to charge households an extra £7.6bn, under the bill, to help fund low-carbon electricity infrastructure by 2020.
The UK Department of Energy and Climate Change (DECC) said this proposal will help the energy companies to avoid excessive gas import dependency, by rising the amount of electricity from renewable to around 30% over the next decade.
The DECC also revealed in the details of the bill that a decision about setting carbon emission targets for 2030 has been delayed until 2016. The UK Labour Party has called this move a "humiliating failure".
Energy Secretary Edward Davey said the decisions reached are "true to the Coalition Agreement" and they can introduce the Bill next week and have essential electricity market reforms up and running by 2014.
"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," Davey added.
Commenting on the announcement, Confederation of British Industry director-general John Cridland said it will send a "strong signal" to investors that the UK government will provide certainty needed by the firms to invest in low-carbon energy.
"We now have political agreement on this critical issue and the Government should get the bill on the statute books as quickly as possible," Cridland added.
EDF Energy CEO Vincent de Rivaz said, "We recognise the Government’s continued commitment to deliver the timetable for electricity market reform, including legally robust arrangements for much needed projects during the transition.
Renewable UK chief executive Maria McCaffery remarked that this is a crucial announcement for the renewable energy sector.
"The news that there is rock solid support across Government for renewable energy, and clear evidence that Treasury and the Department of Energy and Climate Change are in step, provide the industry with exactly the kind of assurances we’ve been calling for. This blows the last few months of political infighting completely out of the water," McCaffery said.
"This will stimulate billions of pounds worth of investment in renewables, creating more than 88,000 jobs in wind, wave and tidal energy alone by 2021."
