Household gas and electricity bills are expected to rocket fourfold to nearly £5,000 a year by the end of the decade to meet Government-imposed green targets. And the price heavy industry will have to pay by 2020 is so high that energy-dependent firms could be wiped out, causing thousands of job losses, said an industry spokesman.

A massive rethink on the cost of ‘green energy’ is taking place in Whitehall among senior regulators and industry, leading some to question whether the public will be prepared to pay increasingly high bills for the UK to become greener than most countries.

Officials at regulator Ofgem now privately admit that a report they issued only last year severely underestimates the cost of cutting carbon emissions by building a new energy infrastructure for the UK. The watchdog’s earlier report suggested that gas and electricity prices could double to £2,000 by 2020 to meet the £233.5 billion cost of going green by investing in nuclear energy and wind and wave power….

Although householders will be badly hit, the damage to industrial energy users will be even more dramatic. These companies, which range from steel and chemical plants to industrial gas companies, are dependent on reasonable energy prices that can, in some cases, account for 70 per cent of their entire costs.

Jeremy Nicholson, spokesman for the Energy Intensive Users’ Group, said the Government’s own figures showed that the price of electricity would go up by up to 70 per cent and the price of gas by a further 50 per cent as a direct result of meeting its renewable energy targets.

‘We are already highly efficient and cannot cut our costs further. If we find ourselves faced with these sort of increases, there will not be any heavy industry left in this country. We will be wiped out and with that thousands of jobs will go.’