By politics.co.uk staff
The government needs extra investments of £8 billion to finance the switch to renewable energy sources by 2020, a report has discovered.
National Audit Office (NAO) report found consumers have been trapped in 20-year deals on clean energy transmission from off-shore wind farms.
"These new deals bring the benefit of competition but lock consumers into 20-year deals to pay prices increasing each year with inflation, whether the assets are used or not," said Amyas Morse, head of the National Audit Office (NAO).
"Competition brings pressure to bear on the levels of those prices, but the terms of future deals will have to be refined to make sure consumers get best value in return for these long-term commitments."
The government is attempting to increase renewable energy levels up to 15% of the UK's total by building numerous off-shore wind farms.
To transmit this electricity back on-shore, the government has developed a new model where companies compete for a licence.
The report found the competition element worked well but the 20-year guarantee, which is overseen by the Gas and Electricity Markets Authority, put the burden of inflation onto the consumer.
The report also warned it is not clear whether savings have been made. The commission suggested benchmarks to prevent excessive costs in construction for transmitting the electricity.