The energy watchdog Ofgem warned that UK consumers faced potentially steep price rises in their gas and electricity bills as supplies become more volatile.
In its review of Britain's energy market, Ofgem said an investment of up to £200 billion is needed to secure supplies and meet environmental targets.
It lists four possible scenarios for the future and in one - that of a strong resurgence in global economies along with missed renewable and carbon targets - Ofgem warned prices could surge by more than 60% by 2016 before falling back.
The regulator said that if the recession continues and gas and electricity prices remain low in the short term, it could reduce the incentive to build new nuclear and renewable power infrastructure.
In that scenario, the country would be increasingly reliant on imported gas for new gas-fired power stations and while bills would not rise by much in the early years, they are expected to climb 22% by 2020.
Ofgem said the possibility of a 60% hike in bills by 2016 would be caused if wholesale gas prices spiked as a result of resurgent global economies competing for energy resources. This scenario also assumes that no new nuclear facility would become operational before 2020.
But the regulator said even in this scenario, bills would drop back and it predicts that by 2020 consumers would pay 25% more than this year.
Ofgem added that the biggest challenges to Britain's energy supply are the country's growing reliance on a volatile global gas market and its ageing power stations, which are nearing the end of their lives.
The regulator also said "significant changes" may have to be made in the way we consume and generate power to manage the "variability associated with increasing reliance on wind power".
It said a "massive" investment of between £95 billion and £200 billion in power plants and other infrastructure was necessary "to secure both energy supplies and climate change targets".
The report outlines the regulator's provisional assessment of supply issues and it is due to make further recommendations, potentially including new policy, at the end of the year.
Energy bills are the hardest bill for consumers to understand, with 82% of people not even knowing what energy tariff they are on.
Giving people the opportunity to monitor and control their energy usage at time of use, and ensure payment is for actual and not estimated energy consumption is at the heart of the forthcoming roll-out of smart meters across Britain.
New Energy Saving Trust research, looking at the optimum design for potential in-home smart meter displays, has tightened the focus of debate to the minimum basic package that will be offered with the meters, and the level on which consumers will be able to monitor their energy usage.
While smart meters will allow a new level of two-way communication between energy companies and consumers, companies have yet to commit to visual displays as a preferred method of achieving this. This leads to the possibility of inconsistent basic packages, with some households having visual displays alongside smart meters and some having to use other, none real-time alternatives.
Considering this, alongside the varying levels of e-literacy across the UK which could affect some people's ability to monitor their energy using other communication alternatives, Energy Saving Trust believes that anything less than providing in-home visual displays, and of a minimum standard, would be a missed opportunity.
The new focus group research highlights the power of visual displays, with a consumer preference for simplicity. The most essential design characteristic was considered to be a graphic indicator of the real-time rate of electricity and/or gas consumption, expressed in a rate of spend in pounds per day. Most of those surveyed also wanted to be able to see rate expressed in watts or kilowatts per day for electricity, either on the same screen or through pressing a button.
A gauge of cumulative daily spend was also universally desired. These, combined with information on current rate of spend, was thought to be sufficient to enable users to track consumption and pinpoint areas of high usage in their home. The ability to access historical data on spend and to compare it to current levels via the press of a button was also considered essential.
Prior studies have shown a link between immediate monitoring of consumption and consumer behaviour. The Energy Saving Trust research also revealed numerous examples of behavioural change as a result of participants using the display and learning about differences in the power consumption of the lights and appliances in their homes. These included participants ceasing to leave equipment to charge overnight, awareness of energy wasted when appliances are on standby and more economical use of washing machines.