GIB will receive funding £3bn ($4.8bn) in funding and is expected to begin operations in 2012 or 13 and will have an additional £18bn ($29bn) to invest in green infrastructure by 2014-15.
The government said the carbon price floor for electricity generation will be introduced from 1 April 2013 and will begin from £16 ($25.7) per tonne of carbon dioxide, rising to £30 ($48.3) per tonne in 2020.
The carbon price support rates for 2013-14 will be equivalent to £4.94 ($7.9) per tonne of carbon dioxide.
The climate change agreements (CCAs) will be extended to 2023 and climate change levy discount on electricity for CCA participants will be increased from 65 to 80% from April 2013.
A consultation on proposals to simplify the agreements will be published later this year.
The government will also provide funding for four carbon capture and storage (CCS) demonstration plants from general taxation but will not levy CCS yet.
Also measures to encourage and incentivise the green deal will be taken up by the government to appeal to households, businesses and prospective providers alike before it is introduced in 2012.
Redpoint Energy undertook supporting analysis for HM Treasury and the Department for Energy and Climate Change (DECC) on the carbon price support.
Redpoint Energy director Duncan Sinclair said that the company estimates that wholesale electricity prices may be around £5-£6/MWh ($8-9.6) or 10% higher by 2020.
"This will have a significant impact on the earnings of power generators; with renewables and nuclear generators benefitting from the higher prices, while coal and older, less efficient gas plant will be hit by higher carbon costs, potentially accelerating closure," Sinclair said.
"The carbon price support may stimulate more investment in low carbon generation, although we expect the Feed-in Tariffs with Contracts for Difference as announced in DECC’s December consultation to be a more significant factor."
