The U.K. 's coalition government Friday ended months of wrangling by agreeing details of an energy policy that increases subsidies for the renewables sector but delays any commitment to emissions-free generation.

The legislation, which the government hopes will provide sufficient clarity for investors to unlock around 110 billion pounds ($175.27 billion) for new infrastructure in order to keep the lights on, includes setting a base price for low-carbon energy but delays until 2016 any decision on a commitment to decarbonize the country's electricity supply by 2030.

This latter detail, coupled with the announcement that a gas strategy will be detailed Dec. 5 by the Chancellor of the Exchequer George Osborne, suggests that natural gas will be key to the U.K. 's future energy mix.

But it will likely disappoint some. Earlier this month some of the U.K.'s biggest companies, including retailer Marks & Spencer PLC (MKS.LN) and National Grid Group PLC (NGG), called for "certainty on our energy future" with a "2030 power sector carbon target," while the U.K. parliament's Environmental Audit Committee has said that a "dash for gas" could make environmental targets unachievable and called for a clear decarbonization target.

The legislation, which will be presented to parliament next week, provides two key mechanisms to transform the U.K. 's electricity sector.

Contracts for difference, long-term contracts that provide a fixed price for power generated by low-carbon energy projects, will guarantee stable revenues that should allow developers to secure the capital investment needed to build large-scale projects like nuclear power stations.

This will be underpinned by a subsidy of GBP7.6 billion by 2020-2021, up from the current level of GBP2.35 billion. Consumer bills are likely to rise as a result. The Department for Energy & Climate Change said it anticipates a 7% rise in average annual heat and power bills by 2020, but said this should be eventually offset by increases in energy efficiency.

The government will also implement a capacity market, where regulator Ofgem and National Grid will, if needed, auction for capacity in advance to avoid shortages. The government hopes this will provide an insurance against future supply pressure in the period between existing generating capacity is closed and replaced.

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