Fresh research has revealed a change of fortunes for the dwindling fleet of power plants, unless ministers use the autumn budget to raise taxes on carbon at a cost of almost £1bn to consumers.

Coal plants have closed apace in ­recent years as the tax made it more economic to burn gas for power. But analysts predict economics will swing back in favour of coal after 2020 as cheap gas prices begin to rise and coal prices fall. A glut of liquefied natural gas projects, which export globally via tankers, has kept a lid on the commodity price of gas but rising demand will squeeze supplies within the next five years, according to Aurora Research.

Meanwhile, a boom in coal production from China could send rising coal prices into reverse. Richard Howard, an analyst at Aurora, said the economic flip would require the Government to set a carbon price of around £40 a ton by 2025 to phase out coal using market-drivers. Currently UK carbon prices are pegged at £23 a ton, nearly five times that paid in the rest of Europe, where the EU market values carbon at just €6 (£5.34) a ton.

But raising the carbon tax could add almost £1bn, or an extra £10 to each energy bill every year, at a time that ministers are hoping to clamp down on rising bills. 

Excluding a market-based approach to rely solely on its political commitment to ban coal from 2025 could leave the door open for the grid to use more coal-fired power in the early 2020s ­before a sudden cliff edge wipes out the final 13GW of power capacity at a stroke. A steadily rising carbon tax combined with the political moratorium would encourage investment in lower carbon options.

“The Government faces a tough ­decision on the future of the carbon price,” said Mr Howard. Ministers will be wary of balancing their competing priorities to meet carbon reduction targets, while securing affordable energy and managing tax receipts, he added.