The proposed new strategy and policy statement, contained in the draft Bill, is an important step in reforming the way Ofgem operates, but Prospect General Secretary Designate Mike Clancy said the real test would be whether this actually leads to more investment in infrastructure and innovation.

"The government's intention to introduce long-term contracts for difference is the right way forward, but more detail is urgently needed on how such arrangements would operate."

The publication of the draft Bill comes on the day that Prospect debates energy and environmental policy at the union's national conference in Bournemouth where delegates will hear of the overwhelming consensus on the need for quicker progress to decarbonise our energy industries. The conference will make clear that the goal should be decarbonisation not deindustrialisation.

"Achieving a balanced low-carbon energy supply is an essential step to building a new economy that provides good quality jobs and growth for the UK," said Clancy. "This will not be achieved by the market alone.

"Prospect also strongly endorses the need for a body that operates at arms-length from government and removes decision-making from the exigencies of the electoral cycle."

Clancy said the government also needed to remember that while getting the financial framework right is crucial, investment in staff and skills will be equally important in the delivery of a low carbon economy.