The UK will need to invest a staggering Â£330 billion in its energy sector by 2030 in order to meet its carbon emissions targets, according to a new report by the London School of Economics (LSE).
The huge investment is required to limit the country's energy demands, as well as to fund the construction of new power plants and to retrofit the existing ones with carbon-reduction technology.
RWE npower's chief executive Volker Beckers said that only around 30 or 40 per cent of the investment could be covered by British energy companies, leaving the majority requiring external investment.
He said: "The key question will be how do we attract pension funds, which are one source of capital, and generally the financial sector, being banks and insurance companies, to join the market?"
Many experts have previously suggested that Â£200 billion worth ofÂ energy investment would be required by 2020, with other reports showing that Britain's power grid alone would require Â£1.6 billion worth of investment in order to connect it with renewable energy.
However the LSE report suggests that in order for Britain to truly reach its long-term climate change targets it would requireÂ sustained period of economic growth, as well as the Eurozone debt crisis being resolved.
The report outlines three possible scenarios with the most optimistic option also the most expensive.
In its report the LSE said: "It involves a financial services sector in good health, that has not only recovered sufficiently to channel higher levels of inward investment and to attract international investment in the UK."
In alternative scenarios revolving around either a gas-focused option or an austerity scenario, growth would be rather slow and neither would see carbon reduction targets being met.
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