Experts believe the shift from traditional fuels such as oil, coal and gas to 'renewable' energy sources, such as wind and solar power, may contribute towards saving the environment but will cost householders dear.

Annual energy bills for a typical home are likely to increase, based on today's prices from around GBP 575 to GBP 700 by the end of the decade.

The warning comes from the Labour-friendly think tank the Institute of Public Policy Research (IPPR), which is generally supportive of the government's campaign, outlined in its 2003 Energy White Paper, to reduce greenhouse gases by concentrating more on low- carbon fuels and sustainable energy.

The plan is for Scotland to rely on renewable sources of energy for 40 per cent of its power by 2020. Across the UK, the target is a relatively modest 20 per cent.

But in a new publication, Sustainability and Social Justice, IPPR energy expert Julie Foley claims the historic switch will be bankrolled by millions of ordinary consumers.

"Meeting the policy commitments laid out in the Energy White Paper is likely to contribute to an increase in energy prices which could be politically unpopular," said Foley, who claimed ministers were bracing themselves for the impact.

"A number of measures outlined, including achieving our renewable electricity aspirations, extending the Energy Efficiency Commitment and participation in the European emissions trading scheme, could all contribute to rising energy prices. It forecasts that there will be a steady rise in electricity and gas prices over the period to 2010."

The IPPR concludes that overall price rises will be in the region of 20 per cent, before the effects of inflation, by 2010.

Utility companies plan to plough over GBP 10bn into building more than 73 wind farms around Britain during the next few years, and analysts say the cost of the investment will inevitably be passed on to customers.

Once built, renewable energy facilities are expensive to maintain compared with traditional sources.

The Royal Academy of Engineering recently estimated that the cost of generating electricity at offshore wind farms was 5.5 pence per kilowatt-hour, more than twice the unit costs for gas turbines and nuclear power, estimated at a little over 2p/kwh. Onshore wind generation costs 3.7p/kwh.

Traditional coal-fired power stations generate at less than 2p/ kwh, but the government's demand that they reduce the carbon emitted by the fuel more than doubles the price.

Business leaders have already warned that the government's plans to enforce a 16.3 per cent cut in greenhouse gases under a new EU scheme starting next year will cost the industry an extra 30 per cent in fuel bills.

Latest figures reveal that the average electricity bill in Britain is around GBP 250 a year, while gas bills are some GBP 75 higher.

Mario Dunn, of watchdog organisation Energywatch, told Scotland on Sunday: "The government has conceded that bills could go up by 15 per cent, and I think that many people will speculate that, if that is what they are prepared to admit to, the real figure may be much higher.

"Whether the switch to renewables is a good thing or not depends on what sort of consumer you are. If you are a middle-income family you might be able to choose greener energy as a lifestyle choice, but our concern is that the most vulnerable people have no choice, and they have to pay whatever they are charged."

Campaigners estimate that some three million UK households are "fuel poor", where heating costs account for more than 10 per cent of incomes.

The Fuel Poverty Strategy, designed to eradicate the problem by 2016, is built around the Warm Front programme, an ambitious scheme to improve energy efficiency in 600,000 homes over the last three years. But an investigation by the spending watchdog the National Audit Office found that only 14 per cent of grants were reaching the least efficient households.

In her IPPR pamphlet, Foley warns that the failings of the scheme represented a major obstacle for the government's attempts to meet the most important targets ministers set themselves in the white paper.

The IPPR also highlights the growing threat to the government's plans to have thousands of huge windmills erected across Britain and around its coasts, to generate renewable energy for millions of homes.

A joint report by the Scottish Executive and the Department of Trade and Industry suggested that the renewables industry already provides around 8,000 jobs, but the planned expansion could increase that figure to between 17,000 and 35,000.

The upsurge in the industry lay behind the establishment of a wind farm components plant in Stornoway, on the Isle of Lewis, last year. But Cambrian Engineering went into administration in February, owing hundreds of thousands of pounds to companies that had supplied materials and services to the Arnish yard.

Foley warned that the increasing local opposition to on-shore wind-farms in several parts of the country was the biggest threat to the burgeoning UK industry, and the government's chances of hitting its renewables targets.

She said: "On-shore wind developments present policy makers with a difficult choice about whether they should be siding with the developer or with local communities.

"It would be unhealthy for local democracy if a precedent was set that local views should not be accounted for when assessing planning applications for either onshore or near-shore wind farms.

"In some cases, however, the government may need to make tough choices about whether the anti-wind attitudes of a vocal minority should over-ride national and international interests to encourage renewable electricity generation and reduce greenhouse gas emissions."